Updated October 5, 2026. Quick answer: Yes, with narrow exceptions. Nebraska starts from federal adjusted gross income and its booklet subtracts only a short list, among them “Civil Service Retirement Annuities received for being employed by federal government.” The top rate is 5.20% for 2025 and 4.55% from 2026.
More state retirement-income schedules, line by line: Nebraska Schedule I.
How Nebraska treats annuity income
| Item | What the documents say |
|---|---|
| Treatment | Taxed; Social Security, military retirement and federal CSRS annuities subtracted |
| 2025 rates | 2.46% up to $4,030 for a single filer, then 3.51%, 5.01% and 5.20% (Tax Calculation Schedule) |
| 2026 rates | The Department’s rate chronology prints a top rate of 4.55% |
| Subtracted | “The entire social security benefit amount included in the federal AGI”; “All military retirees are allowed to exclude 100% of the military retirement” |
| Purchased annuities | The booklet does not address annuities bought outside a retirement plan, which flow through federal adjusted gross income |
A $24,000 example
A CSRS annuity paying $24,000 a year is subtracted, limited to the amount in federal adjusted gross income, so it adds $0.
A commercial annuity paying $24,000 is taxed; the lowest rate alone gives $590.40, computed as $24,000 x 2.46%, and the higher brackets add more as income rises, so this is a floor.
What changes in 2026
The Department’s rate chronology prints a 2026 top rate of 4.55% with new 2026 brackets, against 5.20% for 2025.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal side in Topic no. 410, Pensions and Annuities and Publication 575, Pension and Annuity Income.
Related: whether Nebraska taxes pensions, how Nebraska taxes retirement income, state tax on 401(k) and IRA withdrawals, how a surrendered annuity is taxed, and pension and annuity decisions.
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Answer againSources
- 2025 Nebraska Individual Income Tax Booklet (Nebraska Department of Revenue): https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_Individual_Income_Tax_Booklet.pdf
- 2025 Nebraska Tax Calculation Schedule for Individual Income Tax (Nebraska Department of Revenue): https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/2025_Tax_Calculation_Schedule.pdf
- Nebraska Tax Rate Chronologies, Table 1 (Nebraska Department of Revenue): https://revenue.nebraska.gov/sites/default/files/doc/research/chronology/4-607table1.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.