Nebraska military retirees might have a big tax break coming

Elizabeth Howe
January 13, 2020 - 1:58 pm
Nebraska

Getty Images

Categories: 

Military retirees living in Nebraska could see a big tax break soon. 

Sen. Tom Brewer introduced LB153 back in January 2019 — on Monday it faced its fourth consecutive day in session. Brewer shared on Facebook that he hoped the debate would "fill the Capitol with Veterans."

Currently, Nebraska offers two options for tax exemptions on military retirement pay income. Residents can either choose a 40 percent exclusion of military retirement for up to seven tax years or a 15 percent exclusion for all tax years to begin at 67 years of age. New Nebraska residents are able to choose one of the two options within two years of leaving the military, and once the choice is made it cannot be changed. 

For Brewer — who served in the military for 36 years — this was not enough for retired military personnel. 

Benefits in my Backyard: Nebraska

"These (military retirees) are professionals," Brewer told Journal Star. "They possess skills that are valuable to Nebraska. We need to encourage them to stay here."

LB153 would implement a 50 percent state income tax exemption for military retirement benefits. 

Nebraska is at a disadvantage compared to its neighboring states when it comes to veteran benefits. South Dakota and Wyoming do not have state income tax. Iowa, Kansas, Minnesota, and Missouri all exempt military retirement pay from state income taxation. North Dakota and Indiana both have pending legislation to do the same. 

"Veterans are a great cultural fit for Nebraska, and we want more of them to make their home in Nebraska," said Gov. Pete Ricketts about the bill. "Military families are some of the most dedicated, patriotic citizens in our society.  They’re responsible, disciplined, and ready to give back to their community."

An estimated 13,000 military retirees stand to benefit from LB153. Overall, the state is home to 140,000 veterans. 

"Passing LB 153 is the next logical step in our mission to make Nebraska the best state in the U.S. for military families and veterans," Ricketts said.

Want to get more connected to the stories and resources Connecting Vets has to offer? Click here to sign up for our weekly newsletter.

 

Tags: