LB 998 — Change provisions relating to the state income tax deduction for members of the Nebraska National Guard

LB998 LB998 2026 LEGISLATURELEGISLATIVE OFBILL NEBRASKA998 ONEApproved HUNDREDby NINTHthe LEGISLATUREGovernor SECONDApril SESSION14, LEGISLATIVE2026 BILL 998 FINAL READING   Introduced by Andersen, 49.

Read  firstA timeBILL JanuaryFOR 13,AN 2026ACT Committee:relating to revenue and taxation;

Revenue A BILL FOR AN ACT relating to revenue and taxation;

Be it enacted by the people of the State of Nebraska, -1- LB998 LB998 2026 Section 1.

77-271677-2716 (1) (1) The following adjustments to federal adjusted gross income or, for corporations and fiduciaries, federal taxable income shall be made for interest or dividends received:

(d) There shall be added that portion of the total dividends and other income received from a regulated investment company which is attributable to obligations described in subdivision (c) of this subsection and excluded for federal income tax purposes as reported to -2- LB998 LB998 2026 the recipient by the regulated investment company;

For a nonresident individual, estate, or trust or for a partial-yearpartial- year resident individual, the net operating loss computed on the federal return shall be adjusted by the modifications contained in this section and any carryovers or carrybacks shall be limited to the portion of the loss derived from or connected with Nebraska sources.

(4) Federal adjusted gross income, or, for a fiduciary, federal taxable income shall be modified to exclude the portion of the income or -3- LB998 LB998 2026 loss received from a small business corporation with an election in effect under subchapter S of the Internal Revenue Code or from a limited liability company organized pursuant to the Nebraska Uniform Limited Liability Company Act that is not derived from or connected with Nebraska sources as determined in section 77-2734.01.

(6) There shall be subtracted from federal taxable income a portion of the -1- LB998 LB998 2026 income earned by a corporation subject to the Internal Revenue Code of 1986 that is actually taxed by a foreign country or one of its political subdivisions at a rate in excess of the maximum federal tax rate for corporations.

-4- LB998 LB998 2026 (8)(a) Federal adjusted gross income or, for corporations and fiduciaries, federal taxable income shall be reduced, to the extent included, by income from interest, earnings, and state contributions received from the Nebraska educational savings plan trust as provided in sections 77-1415 to 77-1430 and any account established under the achieving a better life experience program as provided in sections 77-1401 to 77-1409.

(c) For taxable years beginning or deemed to begin on or after January 1, 2021, under the Internal Revenue Code of 1986, as amended, federal adjusted gross income shall be reduced, to the extent included in the adjusted gross income of an individual, by the amount of any contribution made by the individual's employer into an account under the Nebraska educational savings plan trust owned by the individual, not to exceed five thousand dollars per married filing separate return or ten -5- LB998 LB998 2026 thousand dollars for any other return.

(c) For a corporation with a unitary business having activity both inside and outside the state, the increase shall be apportioned to Nebraska in the same manner as income is apportioned to the state by -6- LB998 LB998 2026 section 77-2734.05.

Twenty percent of the total amount of bonus depreciation added back by this subsection for tax years beginning or deemed to begin before January 1, 2003, under the Internal Revenue Code of 1986, as amended, may be subtracted in the first taxable year beginning or deemed to begin on or after January 1, 2005, under the Internal Revenue Code -2- LB998 LB998 2026 of 1986, as amended, and twenty percent in each of the next four following taxable years.

(11)(a) For taxable years beginning or deemed to begin before January 1, 2018, under the Internal Revenue Code of 1986, as amended, -7- LB998 LB998 2026 federal adjusted gross income shall be reduced by contributions, up to two thousand dollars per married filing jointly return or one thousand dollars for any other return, and any investment earnings made as a participant in the Nebraska long-term care savings plan under the Long-Long-Term Term Care Savings Plan Act, to the extent not deducted for federal income tax purposes.

(b) For taxable years beginning or deemed to begin on or after January 1, 2020, and before January 1, 2024, under the Internal Revenue Code of 1986, as amended, the Tax Commissioner shall adjust the dollar -8- LB998 LB998 2026 amounts provided in subdivisions (13)(a)(i) and (ii) of this section by the same percentage used to adjust individual income tax brackets under subsection (3) of section 77-2715.03.

(c) For taxable years beginning or deemed to begin on or after January 1, 2021, and before January 1, 2024, under the Internal Revenue Code of 1986, as amended, a taxpayer may claim the reduction to federal -9- LB998 LB998 2026 adjusted gross income allowed under this subsection or the reduction to federal adjusted gross income allowed under subsection (13) of this section, whichever provides the greater -3- LB998 LB998 2026 reduction.

(16) For taxable years beginning or deemed to begin on or after -10- LB998 LB998 2026 January 1, 2021, under the Internal Revenue Code of 1986, as amended, federal adjusted gross income shall be reduced by the amount received as a Segal AmeriCorps Education Award, to the extent such amount is included in federal adjusted gross income.

(21)(a) (21) For taxable years beginning or deemed to begin on or after January 1, 2025, and before January 1, 2027, under the Internal -11- LB998 LB998 2026 Revenue Code of 1986, as amended, an individual who is a member of the Nebraska National Guard may exclude one hundred percent of the income received from any of the following sources to the extent such income is included in the individual's federal adjusted gross income:

duty status such as members attending drills, annual training, and military schools and members who are serving in a 32 U.S.C.

-4- LB998 LB998 2026 (b) For taxable years beginning or deemed to begin on or after January 1, 2024, under the Internal Revenue Code of 1986, as amended, federal adjusted gross income or, for corporations and fiduciaries, -12- LB998 LB998 2026 federal taxable income shall be reduced by the amount of contributions made to the Medical Debt Relief Fund, to the extent not deducted for federal income tax purposes.

For the purposes of this subsection, bullion has the same meaning as in section -13- LB998 LB998 2026 77-2704.66.

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