This bill amends section 77-2716 of the Revised Statutes Supplement, 2025, to adjust federal adjusted gross income for Nebraska taxpayers by introducing several new provisions and repealing the original section. Key adjustments include the subtraction of interest or dividends from U.S. obligations and Build America Bonds, as well as income from regulated investment companies. A significant new provision allows for a reduction in federal adjusted gross income for employer contributions to educational savings plans, capped at $5,000 for married individuals filing separately and $10,000 for other returns. The bill also outlines specific adjustments for military retirement benefits, Segal AmeriCorps Education Awards, and cancer benefits for firefighters, while establishing a phased exclusion for social security benefits that will culminate in full exclusion by 2024.

Additionally, the bill introduces amendments effective for taxable years from January 1, 2023, to January 1, 2026, allowing individuals to subtract amounts received as student loan repayment assistance, health insurance premiums paid by retired firefighters and law enforcement officers, and annuities from the Civil Service Retirement System. It also permits members of the Nebraska National Guard to exclude income from certain military duties and allows reductions for discharged medical debt and contributions to the Medical Debt Relief Fund. For taxable years beginning on or after January 1, 2025, the treatment of net capital losses and gains from the sale of gold or silver bullion will change, and a new provision will require an increase in federal adjusted gross income for depreciation deductions of qualified production property starting January 1, 2026.

Statutes affected:
Introduced: 77-2716