This bill amends section 77-2716 of the Revised Statutes Cumulative Supplement, 2024, to introduce specific adjustments to the taxation of tip income, aiming to enhance fairness in how such income is taxed. The new legal language clarifies that starting January 1, 2025, individuals will be able to subtract tip income from their federal adjusted gross income, which aligns state tax regulations with the realities of income earned through tipping. Additionally, the bill includes provisions for repealing the original section, indicating a significant shift in the treatment of tip income under Nebraska's tax laws.

In addition to the adjustments for tip income, the bill introduces several other amendments to the tax code effective for various taxable years from January 1, 2023, to January 1, 2026. These amendments allow for the subtraction of amounts received as student loan repayment assistance, health insurance premiums paid by retired firefighters or law enforcement officers, and annuities from the Civil Service Retirement System. It also enables members of the Nebraska National Guard to exclude 100% of income from specific military service activities and allows individuals to reduce their federal adjusted gross income by discharged medical debt and contributions to the Medical Debt Relief Fund. Furthermore, the bill addresses the treatment of capital gains and losses from the sale of gold or silver bullion, adding net capital losses to federal adjusted gross income while permitting net capital gains to be subtracted, with certain exceptions.

Statutes affected:
Introduced: 77-2716