This bill amends section 77-2716 of the Revised Statutes Supplement, 2025, to enhance the state income tax deduction provisions for members of the Nebraska National Guard. A significant change is the introduction of a provision that allows individuals to exclude 100% of their military retirement benefit income from federal adjusted gross income for taxable years beginning on or after January 1, 2022. This replaces the previous limitation that allowed only a percentage of military retirement benefits to be excluded for a limited number of years, thereby providing greater financial relief to veterans. The bill also includes various tax adjustments related to educational savings plans, social security benefits, and cancer benefits for firefighters, while repealing the original section of the law to streamline the tax code.

Additionally, the bill introduces amendments to the Internal Revenue Code of 1986, allowing individuals to reduce their federal adjusted gross income by amounts received as annuities under the Civil Service Retirement System starting January 1, 2024. It further permits members of the Nebraska National Guard to exclude 100% of their income from military duty statuses from their federal adjusted gross income for taxable years beginning on or after January 1, 2025, with expanded eligibility for 10 U.S.C. military duty status starting January 1, 2027. The bill also allows reductions for discharged medical debt and contributions to the Medical Debt Relief Fund, effective January 1, 2024, and specifies the treatment of net capital losses and gains from the sale of gold or silver bullion, effective from January 1, 2025.

Statutes affected:
Introduced: 77-2716
Final Reading: 77-2716
Slip Law: 77-2716