This bill amends section 77-2716 of the Revised Statutes Supplement, 2025, to introduce an income tax adjustment specifically for tip income and overtime compensation. It aims to provide a more equitable tax treatment for individuals earning these types of income, recognizing their unique nature in federal adjusted gross income calculations. The bill also includes provisions for repealing the original section, streamlining the tax code to reflect these new adjustments and enhancing the fairness of the tax system in Nebraska.

Key provisions of the bill include the introduction of new deductions for qualified tips and overtime compensation, effective January 1, 2026, allowing taxpayers to deduct up to $25,000 for qualified tips and $12,500 for qualified overtime compensation, with reductions based on income thresholds. Additionally, the bill addresses other tax code amendments, such as the subtraction of student loan repayment assistance, health insurance premiums for retired firefighters and law enforcement officers, and deductions for medical debt discharged under the Medical Debt Relief Act. The bill also outlines the treatment of capital gains and losses from the sale of gold or silver bullion, further updating the tax code to reflect these changes.

Statutes affected:
Introduced: 77-2716