Refundable Income Tax Credit

(For information purposes only. Seek guidance from a tax professional or the Nebraska Department of Revenue for specific questions on the tax credit and how to find the credit in your tax software.)

No matter your income tax situation – if you pay property taxes, you are eligible for the income tax credit. For tax year 2023, the credit equals 30% of property taxes paid to schools and 55% of property taxes paid to community colleges. This means…

The Average Nebraska Farm, owing $29,000 in property taxes, is eligible for over $9,400 in total tax credits – a 33% reduction!

A Standard $250,000 Home, owing $4,804 in property taxes, is eligible for over $1,153 in total tax credits – a 24% reduction

Farm Bureau Advocacy is delivering tax relief to you. Over the course of the next five years, the tax relief package will save Nebraskans an estimated $1.3 billion in property taxes.

Want to get started?

To claim your income tax credits, you will need to file Form PTC. For this, you’ll need the tax dollar amount you paid on each piece of property towards schools and community colleges. Use this Look-Up Tool to find these. Then, fill out Form PTC and submit along with your traditional income tax returns to claim your credits. Didn’t claim your tax credits from 2021 or 2022? You can file Form PTCX to claim those from past years!

View Informational Video
View Step-by-Step Instructions (PDF)
PTC Forms

2023 PTC Form

2022 PTCX Form

2021 PTCX Form

FAQs

(For information purposes only. Seek guidance from a tax professional or the Nebraska Department of Revenue for specific questions on the tax credit.)

What is the refundable income tax credit?

LB 1107, passed in 2020, created the refundable income tax credit program in Nebraska. This program allows property owners to receive a portion of the property taxes paid towards public school districts through the income tax filing process. LB 873, passed in 2022, expands this program including taxes paid towards community colleges in the refundable income tax credit program.

The credit applies to property taxes paid 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. It does not apply to taxes paid on personal property like agricultural machinery and equipment or those paid on motor vehicles.

What is the credit rate under the program?

The credit rate varies each tax year depending upon state revenues and the amount of property taxes levied by schools and community colleges. For tax year 2020, the credit equaled 6% of property taxes paid to public schools in the calendar year. In tax year 2021, taxpayers were eligible for 25.3% refund on school district taxes. For tax year 2022, the credit rate is set at 30% of all property taxes paid towards public schools AND community colleges. For tax year 2023, the credit rate is set at 30% of all property taxes paid towards public schools and 55% of property taxes paid towards community colleges.

I didn’t claim my tax credits last year! Is it too late to receive those?

Tax credits for property taxes paid in 2021 or 2022 can still be claimed by filing Form PTCX. Tax credits for property taxes paid in 2023 are claimed by filing Form PTC.

Will the tax credit program continue to grow?

Through LB 1107, the program’s funding increases when state tax revenues exceed specific revenue thresholds. Since 2020, program funding has grown from $125 million to $561 million in 2022, and the rate from 6% to 30%, due to this stipulation. Going forward, dollar growth is set to increase by a percentage in statewide real property values, capped at 5% each year.

While property assessment values will not be available until spring. LB 873, passed in 2022,  specifies funding will not be less than the amount available the year prior, even if values decline. In addition, legislation has been introduced to expand the taxes eligible for credit beyond only what is paid to schools and community colleges. The outlook is positive, but we can only wait and see what comes to fruition.

Why are the dollar amounts on my property tax statement different than those in the Look-up Tool?

On many property tax statements, counties provide a breakdown of the entities levying property taxes and the exact dollar amounts going to each. The dollars going towards schools and community colleges is likely to be different from the number you see in the Department of Revenue’s Look-up Tool.

This is because your tax statement details the tax amount levied, while the Look-up Tool tells you the net amount you paid. This discrepancy is tied to automatic tax deductions through Nebraska’s Property Tax Relief Fund. This deduction, listed as a credit on your statement, reduces each of the levy amounts in the breakdown proportionally, meaning what you actually pay to schools and community colleges is less than the amount posted on your statement.

As the income tax credit only applies to property taxes paid, the dollar amounts from your tax statement cannot be transferred directly onto Form PTC. And while the amount paid would be fairly straightforward to calculate, we recommend using the Look-up Tool or Nebraska Taxes Online to claim these credits.