Nebraska Estate Taxes
Nebraska has an estate tax that is intended to absorb the maximum credit against the federal estate tax. It also has a layered inheritance tax system. The amount of tax imposed depends on who gets what after you are gone, according to the following classes of beneficiaries:
- Class 1: Transfers to a surviving spouse are entirely exempt from tax. Other members of this class include a decedent's parents, grandparents, siblings, children (adopted or biological), grandchildren (adopted or biological), any person to whom the decedent stood in acknowledged relation of a parent for at least 10 years prior to death, or the spouse or surviving spouse of any such persons. After a $10,000 per beneficiary exemption, transfers to members of this class are taxed according to the rates in the table below.
- Class 2: These beneficiaries include a decedent's uncle, aunt, niece, or nephew related to the deceased by blood or legal adoption, or any lineal descendant of the same. Each such beneficiary is allowed a $2,000 exemption, after which a transfer is taxed at the rates in the table below.
- Class 3: Any transfers that don't involve members of the above two classes are taxed according to the table below (after a $500 per beneficiary exemption). However, transfers involving charitable and educational bequests or a bequest to a political subdivision or government agency are completely tax free.
| Nebraska Inheritance Tax Rates |
| Value of Share in Excess of Exemption |
Class 1 Tax on Col. (1) |
Class 1 Rate on Excess |
Class 2 Tax on Col. (1) |
Class 2 Rate on Excess |
Class 3 Tax on Col. (1) |
Class 3 Rate on Excess |
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
| $0 |
$500 |
$0 |
0 |
$0 |
0 |
$0 |
6% |
| $500 |
$2,000 |
$0 |
0 |
$0 |
0 |
$30 |
6% |
| $2,000 |
$5,000 |
$0 |
0 |
$0 |
6% |
$120 |
6% |
| $5,000 |
$10,000 |
$0 |
0 |
$180 |
6% |
$300 |
9% |
| $10,000 |
$20,000 |
$0 |
1% |
$480 |
6% |
$750 |
12% |
| $20,000 |
$50,000 |
$100 |
1% |
$1,080 |
6% |
$1,950 |
15% |
| $50,000 |
$60,000 |
$400 |
1% |
$2,880 |
6% |
$6,450 |
18% |
| $60,000 |
and up |
$500 |
1% |
$3,480 |
9% |
$8,250 |
18% |
Additional estate tax. Previously, Nebraska imposed an additional estate tax equal to the excess, if any, of the maximum credit allowed under the federal estate tax law over the aggregate of state inheritance taxes. Effective January 1, 2003, the additional estate tax is decoupled from the federal estate tax so that it will continue to be levied after the federal credit is phased out in 2005.
For decedents dying on or after July 1, 2003, the Nebraska estate tax is the greater of the maximum state tax credit allowed under federal estate tax law or the amount provided in the following table:
| Nebraska Taxable Estate |
| At least |
But less than |
Amount of tax imposed |
| $0 |
$100,000 |
5.6% of amount over $0 |
| $100,000 |
$500,000 |
$5,600 + 6.4% of amount over $100,000 |
| $500,000 |
$1,000,000 |
$31,200 + 7.2% of amount over $500,000 |
| $1,000,000 |
$1,500,000 |
$67,200 + 8% of amount over $1,000,000 |
| $1,500,000 |
$2,000,000 |
$107,200 + 8.8% of amount over $1,500,000 |
| $2,000,000 |
$2,500,000 |
$151,200 + 9.6% of amount over $2,000,000 |
| $2,500,000 |
$3,000,000 |
$199,200 + 10.4% of amount over $2,500,000 |
| $3,000,000 |
$3,500,000 |
$251,200 + 11.2% of amount over $3,000,000 |
| $3,500,000 |
$4,000,000 |
$307,200 + 12% of amount over $3,500,000 |
| $4,000,000 |
$5,000,000 |
$367,200 + 12.8% of amount over $4,000,000 |
| $5,000,000 |
$6,000,000 |
$495,200 + 13.6% of amount over $5,000,000 |
| $6,000,000 |
$7,000,000 |
$631,200 + 14.4% of amount over $6,000,000 |
| $7,000,000 |
$8,000,000 |
$775,200 + 15.2% of amount over $7,000,000 |
| $8,000,000 |
$9,000,000 |
$927,200 + 16% of amount over $8,000,000 |
| $9,000,000 |
and above |
$1,087,200 + 16.8% of amount over $9,000,000 |
Deductions. The following items can be deducted from a decedent's estate when calculating Nebraska estate tax liability:
- decedent's debts
- funeral expenses
- medical expenses of last illness
- administration expenses, including commissions and fees of executors and administrators
- reasonable attorneys' fees
- federal estate taxes attributable to property subject to state inheritance tax, income and property taxes accrued up to the time of death
- mortgages
Returns. Within three months of the executor's or administrator's appointment, an inventory of the estate must be filed with the County Court having jurisdiction over the administration of the estate. A Nebraska estate tax return must be filed within 12 months of the decedent's death. Any taxes due must be paid during the same time frame to the County Treasurer of the county where the estate is administered.
Generation-skipping transfer tax. Nebraska once imposed a generation-skipping transfer tax equal to the federal credit. Effective January 1, 2003, however, the Nebraska tax is decoupled from the federal generation-skipping transfer tax so that it will continue after the federal credit is phased out in 2005. Each taxable generation-skipping transfer will be taxed at a rate of 16 percent of the Nebraska taxable transfer.
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