This bill amends sections 77-2716 and 77-2734.01 of the Revised Statutes Supplement, 2025, to modify income tax provisions related to S-corporations and limited liability companies. A significant change is the introduction of a provision that allows for the exclusion of income or loss from small business corporations with an S election or limited liability companies not connected with Nebraska sources from federal adjusted gross income for taxable years beginning before January 1, 2026. This adjustment aims to provide tax relief to individuals and entities involved in these business structures, thereby enhancing the economic environment for small businesses in Nebraska.

Additionally, the bill includes various amendments to the Nebraska tax code, allowing individuals to subtract 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 from their federal adjusted gross income. It also provides tax relief for Nebraska National Guard members by permitting the exclusion of certain income. Furthermore, for taxable years beginning on or after January 1, 2026, shareholders of small business corporations and members of limited liability companies will be required to include their proportionate share of federal income in their Nebraska taxable income. The bill also addresses the taxation of net capital losses and gains from the sale of gold or silver bullion and repeals previous sections of the tax code that are now superseded by these changes.

Statutes affected:
Introduced: 77-2716, 77-2734.01