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Category: Nebraska

Nebraska Subtractions from Income

Railroad Retirement Board

Enter any federally taxed retirement benefits paid by the Railroad Retirement Board (RRB), such as Tier I and Tier II benefits, railroad retirement sick pay, disability, and unemployment benefits, included in federal AGI.


Special Capital Gains/Extraordinary Dividends Deduction

This deduction is available only to Nebraska residents. Enter the amount of the special capital gain or extraordinary dividend. Please refer to the Special Capital Gains Election and Computation, Form 4797N, for additional information.


Nebraska 529 College Savings Plan

If during 2016 you, as the account owner, or custodial parent/guardian of an UGMA/UTMA account, made contributions to one or more college savings account established under Nebraska's Educational Savings Plan Trust, then enter the amount of your contributions, up to a maximum of $10,000 ($5,000 if married, filing separately).


The Nebraska College Savings Program includes the following Plans:


* NEST Direct College Savings Plan;

* NEST Advisor College Savings Plan;

* TD Ameritrade 529 College Savings Plan, and

* The State Farm College Savings Plan.


Only the account owner  or parent/guardian custodian of an UGMA/UTMA account who made the contributions may claim this deduction. You cannot deduct contributions made to other states' 529 college savings plans here. However, if an account in another state's plan is rolled over to a Plan in the Nebraska Educational Savings Plan Trust, the amount received in a qualified rollover, up to a maximum of $10,000 ($5,000 if married, filing separately), is eligible for the deduction.


For questions about this plan please go here, or contact the State Treasurer's Office at (402) 471-2455.


Nebraska Long-Term Care Savings Plan Contribution

Enter the amount contributed in 2016 to the account owner’s Nebraska Long-Term Care Savings Plan account, not to exceed the maximum contribution amount of $1,000 (or $2,000 if married filing jointly). The Nebraska Long-Term Care Savings Plan is administered by the Nebraska State Treasurer. Only the account owner may claim this deduction. For more information go to the treasurer's office by clicking here or call the State Treasurer's Office at (402) 471-2455.


Note: The 2016 Nebraska Legislature enacted LB 756 which terminates the Long-Term Care Savings Plan Act on January 1, 2018. No deductions will be allowed for tax years after 2017. Account owners will be sent the balance of their accounts on January 1, 2018 without penalty. 


Nebraska Long-Term Care Savings Plan Earnings 

Enter any interest earned on contributions to the Nebraska Long-Term Care Savings Plan to the extent the interest is included in federal AGI (Adjusted Gross Income).


Nebraska Achieving a Better Life Experience Act Plan Contributions

If during 2016, you made contributions to one or more Nebraska Achieving a Better Life Experience Program (Enable Savings Plan) accounts, enter the account numbers you contributed to and the amount of your contributions, up to a maximum of $10,000 ($5,000 if married, filing separately) on line 20. 

You cannot deduct contributions made to other states’ 529A (ABLE) savings plans on line 20.

For questions about the Nebraska ABLE Program, go to, or contact the State
Treasurer’s Office at 402-471-2455.


Other Nebraska Subtractions from Income

* S Corporation and LLC Non-Nebraska Income - Enter the amount of income from an S corporation or LLC that is not from Nebraska sources. Attach the Federal Schedule K-1 and Nebraska Schedule K-1N received from the S corporation or LLC, together with a copy of the Nebraska apportionment factor of the S corporation or LLC, where appropriate. For additional information see Revenue Ruling 25-94-1.


* Nonresident Military Compensation - Enter the amount of nonresident military servicemember active duty pay included in the servicemember’s federal AGI. The 2016 Form W-2 issued by the armed forces to the servicemember must be attached to Form 1040N. The Form W-2 must identify the income as attributable to a state other than Nebraska in Box 15. If "NE" is shown on the W-2, the adjustment will not be allowed. Only active duty military service compensation can be deducted.


* Native American Income - Native American Indians residing on a Nebraska Native American Indian Reservation with income derived from sources within the boundaries of the reservation may deduct this income.


* Claim of Right of Repayment - Enter the amount required to be included on your federal return for a claim of right repayment.


* Net Operating Loss Carry Forward - A Nebraska net operating loss from an earlier year which is available for carryforward to 2016 is deducted.


* AG Revenue Bonds Issued by State - Enter the amount of interest income from Nebraska Agricultural Revenue Bonds, that is included in federal AGI.


* Taxable Build America Bond Interest - Federally Taxable Build America Bonds Issued by Nebraska Governmental Units. The America Recovery and Revitalization Act of 2009 established a category of federally taxable bonds that are exempt under Nebraska law. Income from these bonds may be deducted.