This bill amends section 77-2716 of the Revised Statutes Cumulative Supplement, 2024, to introduce an income tax adjustment specifically for tip income, aiming to provide clarity and fairness in the taxation of earnings derived from tips, which are significant for individuals in service industries. The bill includes new legal language that outlines adjustments to federal adjusted gross income for individuals receiving tip income, ensuring appropriate treatment within the state's tax framework. Additionally, it repeals the original section to implement these comprehensive updates to existing tax regulations.

The proposed changes also allow individuals to subtract amounts received as student loan repayment assistance under the Teach in Nebraska Today Act, health insurance premiums paid by eligible retired firefighters and law enforcement officers, and income from various military service-related activities. Starting in 2024, individuals can reduce their federal adjusted gross income by amounts related to medical debt relief and contributions to the Medical Debt Relief Fund. Furthermore, beginning in 2025, individuals will be able to subtract tip income from their federal adjusted gross income. The bill also addresses capital gains and losses from the sale of gold or silver bullion, specifying the treatment of net capital losses and gains, with certain exceptions for retirement plan distributions.

Statutes affected:
Introduced: 77-2716