2026 tax year · cross-border wages
Crossing a state line into or out of Nebraska
Nebraska taxes its residents on income earned anywhere, and taxes non-residents on work done inside it. Which return you file depends on which direction you commute.
Nebraska borders 6 states. They fall into 2 different situations, and which one applies decides whether you file one return or two.
Where you file a nonresident return and claim a credit
Nebraska has no agreement with Colorado, Iowa, Kansas and Missouri. Work in one of these and you file a nonresident return there, report the same income again to Nebraska, and claim a credit for what you already paid. The credit is capped at your Nebraska liability, so you are not taxed twice, the combined bill lands at roughly the higher of the two rates. On $70,000, Kansas costs the most at $3,600 and Colorado the least at $2,884, $716 between them.
| Work state | Its tax | Nebraska after credit | Total | Rate that governs |
|---|---|---|---|---|
| Colorado | $2,800 | $84 | $2,884 | Nebraska |
| Iowa | $2,660 | $224 | $2,884 | Nebraska |
| Kansas | $3,600 | $0 | $3,600 | Kansas |
| Missouri | $3,190 | $0 | $3,190 | Missouri |
Where the work state takes nothing
South Dakota and Wyoming levy no personal income tax, so there is no return to file there and no credit to claim. But Nebraska still taxes the wages as a resident. The catch is withholding: an employer in South Dakota or Wyoming has no state income tax to withhold, so nothing is taken out for Nebraska either. The liability is real and nothing is being set aside against it, which usually means Nebraska estimated payments.
What Nebraska itself takes across a salary range
A single filer, taking the standard deduction. This is the figure every arrangement above is measured against, the tax Nebraska charges a resident, whether the work happened inside the state or over a line:
| Wages | Nebraska tax | Effective rate |
|---|---|---|
| $45,000 | $1,747 | 3.88% |
| $70,000 | $2,884 | 4.12% |
| $120,000 | $5,159 | 4.30% |
Coming the other way: living in a no-income-tax state, working in Nebraska
South Dakota and Wyoming border Nebraska and levy no personal income tax of their own. A resident of South Dakota or Wyoming who works in Nebraska has the simplest arrangement on this page and the least room to improve it: Nebraska taxes the wages earned inside it, $2,884 on $70,000, there is no home-state return, and so there is nothing to claim a credit against. Living across a border that charges nothing does not reduce the Nebraska bill by a cent.
Reciprocity cannot help either, even where Nebraska has agreements: reciprocity shifts the income to the home state's return, and a state with no income tax has no return to shift it to.
What Nebraska charges as your home state
Nebraska taxes income on 3 graduated brackets for 2026, from 2.46% up to 4.55%. Because wages stacks on top of any other income, a second source can push part of it into the next bracket.
On the 2026 rate itself: top rate reduced from 5.2% to 4.55% in 2026. Further reductions to 3.99% by 2027.
Nebraska is one of the twelve states that still taxes Social Security benefits, which matters if you are drawing benefits alongside wages.
State income tax on wages only, 2026 rates. Not tax advice, what this does and doesn't cover.