This bill amends section 77-2716.01 of the Revised Statutes Cumulative Supplement, 2024, to modify the provisions regarding individual income tax deductions in Nebraska. It establishes that for tax years beginning before January 1, 2026, individuals who itemize deductions on their federal return can subtract from their federal adjusted gross income the greater of the standard deduction or their federal itemized deductions, excluding state or local income taxes. For tax years starting on or after January 1, 2026, the same rule applies, but with a limitation on the amount for state or local income taxes included in federal itemized deductions, which cannot exceed the applicable limitation set for taxable years beginning after 2029.

Additionally, the bill introduces new language that specifies the adjustments to the personal exemption credit and standard deduction amounts based on inflation and the number of child and dependent credits claimed on federal returns. The credit amount for personal exemptions is set to be adjusted for inflation starting from tax year 2018, with specific amounts outlined for each tax year. The bill also repeals the original section 77-2716.01, indicating a comprehensive update to the tax deduction framework in Nebraska.

Statutes affected:
Introduced: 77-2716.01