There’s a new wrinkle this year for taxpayers who pay property taxes to schools and file Nebraska income taxes—a refundable income tax credit for property taxes paid to schools. The credit was created with the passage of LB 1107 last year which dedicated $125 million towards the program.
The credit equals 6 percent of property taxes paid to schools but can change in future years as the total amount of credits could increase with state revenue growth. Nebraska Farm Bureau estimates the credit could result in a tax reduction of $41 million this year for agricultural landowners. More background on the credit can be found at: https://revenue.nebraska.gov/about/nebraska-income-tax-credit-school-district-taxes-paid-nebraska-property-tax-incentive-act-0.
The credit applies to property taxes paid to schools on real property (land, buildings, residences) excluding taxes levied for bond repayments and taxes levied as a result of voter-approved overrides of levy limits. the Nebraska Department of Revenue (NDOR) has created a School District Property Tax Look-up Tool to assist taxpayers when filing their income taxes (Figure 1). The link to the tool is: https://ndr-1107parcel.ne.gov/parcelldLookup/faces/search.xhtml. The tool will help taxpayers determine the allowable dollar amount of school district property taxes paid for each parcel to claim for the credit. A parcel ID number and county location will be needed for each parcel to use the tool.
Figure 1. NDOR Property Tax Look-up Tool
Source: Nebraska Department of Revenue