Bill > LB28

This bill provides an income tax adjustment for tip income by amending the state tax code to allow individuals to subtract tip income from their federal adjusted gross income for taxable years beginning on or after January 1, 2025. Specifically, the bill adds a new provision (subsection 27) to Section 77-2716 of the Nebraska Revised Statutes that enables taxpayers to reduce their taxable income by the amount of tip income they have received, to the extent that income is already included in their federal adjusted gross income. This means that service industry workers who earn tips as part of their compensation will be able to exclude those earnings from state income tax calculations, potentially providing financial relief for workers in professions like restaurants, bars, and other service-based industries where tips are a significant portion of total earnings. The bill represents a targeted tax break aimed at supporting workers in tip-based professions by reducing their state tax burden. The provision will take effect for tax years beginning on or after January 1, 2025, giving taxpayers and tax authorities time to prepare for the implementation of this new income adjustment.

Budget and Finance

https://nebraskalegislature.gov/bills/view_bill.php?DocumentID=59224