Nebraska Response – State Conformity With Federal Changes

Nebraska’s response are in bold print below:

Disaster Tax Relief:

  • Qualified Hurricane casualty loss deductions – For federal purposes a qualified hurricane disaster casualty loss is calculated as the loss less $500. The the 10% AGI limit does not apply to these casualty losses. The deductible loss can be taken as either an itemized deduction or an increase in the taxpayer’s standard deduction. No.  For additional information regarding Nebraska’s standard deduction see Neb. Rev. Stat. § 77-2716.01 (2).
  • Qualified retirement plan distributions for individuals that were in a Hurricane disaster area are not subject to early withdrawal penalty and may be taxed over a three year period.  Yes, the Nebraska penalty for early withdrawal is 29.6% of the federal penalty.  If there is not federal penalty there would be no Nebraska Penalty.  Also, Nebraska tax is based on federal AGI.

  • Charitable contributions for hurricane relief are not subject to the overall limit on itemized deductions or the 50% AGI limit.  When a taxpayer itemizes Nebraska allows Federal Itemized deductions minus the amount claimed for Nebraska state taxes.

 

Itemized Deductions – Medical deduction threshold of 7.5%  (Was supposed to be 10% for all taxpayers before the Tax Cuts and Jobs Act was passed).  When a taxpayer itemizes Nebraska allows Federal Itemized deductions minus the amount claimed for Nebraska state taxes.

Bonus Depreciation

  • If your state allows bonus depreciation will you allow the 100% bonus depreciation percentage for qualified assets (both new and used) placed in service after September 27, 2017?
  • If you will allow for 100% bonus depreciation will you allow a taxpayer to elect to use a 50% bonus rate for assets placed in service between September 28, 2017 and December 31, 2017?
  • If you allow bonus depreciation will you allow the new 100% rate for qualified film, TV and theatrical production assets?

Currently there is no requirement in the Nebraska law for an adjustment based on bonus depreciation.

Does your state require the legislature to meet in order to conform with any federal changes signed into law during the year? If so when will they meet? The Nebraska Legislature is currently in session and bills have been introduced which may affect the impact of the federal changes.