Updated October 8, 2026. Quick answer: Generally no, if you qualify for the federal exclusion. Nebraska taxes residents on “their federal adjusted gross income as modified in section 77-2716”, so a gain excluded under section 121 stays out. Gain above it is taxed at graduated rates with a top rate of 4.55% for 2026, and the seller pays a documentary stamp tax on the deed.
Nebraska tax on home sale profit at a glance
| Item | What the documents say |
|---|---|
| Profit on your main home | Residents are taxed on federal adjusted gross income as modified; the pages read do not mention section 121 |
| Rate on gain above the exclusion | Graduated: 2.46%, 3.51% and 4.55% for 2026 (top rate 5.20% for 2025) |
| Collected at the sale | Documentary stamp tax on the grantor (seller): two dollars and twenty-five cents for each one thousand dollars of value; no nonresident withholding found |
| Source | Nebraska Department of Revenue; Nebraska Legislature |
What the Nebraska documents say
Neb. Rev. Stat. 77-2714.01 defines the taxable income of a resident as “their federal adjusted gross income as modified in section 77-2716”. On the 2025 Form 1040N, line 5 is federal adjusted gross income: “This is the amount reported on your federal return as AGI”. Under the federal statute, “Gross income shall not include gain from the sale or exchange” of a principal residence that meets the ownership and use tests, so an excluded gain never enters federal adjusted gross income. That is reasoning from two documents. The Nebraska pages read never name section 121.
The 2025 booklet says “the highest rate for Nebraska taxable income is reduced to 5.20%” for 2025. The statute sets the 2026 bracket at “(v) 4.55% for taxable years beginning or deemed to begin” in 2026, and the Department’s rate chronology lists 2.46%, 3.51% and 4.55% for tax year 2026.
What the federal exclusion requires
Most state answers start here. The statute says “Gross income shall not include gain from the sale or exchange” of property that, during the five years before the sale, you owned and used as your principal residence for periods adding up to two years or more. The limit is “shall not exceed $250,000”, or $500,000 for a husband and wife who make a joint return and meet the statute’s conditions. See CMG’s home sale taxes page and exclusion calculator.
A worked example at a $400,000 gain
An illustration, not a return: a married couple in Nebraska sells their main home with a gain of $400,000 and meets the federal ownership and use tests. The gain is below the $500,000 joint exclusion, so it is not in federal adjusted gross income and, on the documents read, $0 is taxed by Nebraska. As a second illustration, computed below, suppose the gain were $600,000. The amount above the exclusion would then be $100,000, which is taxed at the graduated rates; this page computes no tax because the bracket depends on the rest of the return.
What is collected at the sale
Nebraska’s documentary stamp tax statutes say “There is hereby imposed a tax on the grantor” executing a deed, at “two dollars and twenty-five cents for each one thousand dollars” of value. The pages read show no principal-residence exemption from it and no nonresident real estate income tax withholding.
What changes in 2026
Nebraska: the top individual rate falls from 5.20% for 2025 to 4.55% for 2026 under Neb. Rev. Stat. 77-2715.03.
What the documents do not say
- The pages read never name section 121, so conformity is reasoned from the federal starting point. The statute’s exemptions from the stamp tax were not read line by line. The booklet is for tax year 2025; the 2026 rates come from the statute and the Department’s chronology.
Common mistakes
- Using the 5.20% top rate printed in the 2025 booklet for a 2026 sale; the statute sets 4.55% for 2026.
- Treating the documentary stamp tax as a tax on your profit; it is computed on the value of the property, not on gain.
- Assuming the answer for one state applies to another, or that the state answer changes the federal tax on the sale.
Related: home sale taxes, state tax on home sale profit, how Nebraska taxes capital gains, Nebraska retirement taxes, and home sale exclusion calculator.
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Answer againSources
- 2025 Nebraska Individual Income Tax and Amended Return Booklet: https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_Individual_Income_Tax_Booklet.pdf
- Neb. Rev. Stat. 77-2714.01 (Terms, defined): https://nebraskalegislature.gov/laws/statutes.php?statute=77-2714.01&print=true
- Documentary Stamp Tax statutes 76-901 to 76-908: https://revenue.nebraska.gov/sites/default/files/doc/pad/legal/DocStamp_Statutes.pdf
- Neb. Rev. Stat. 77-2715.03 Individual Income Tax Brackets and Rates: https://www.nebraskalegislature.gov/laws/statutes.php?statute=77-2715.03
- Nebraska Tax Rate Chronologies: Individual Income Tax (Rev. 2-2026): https://revenue.nebraska.gov/sites/default/files/doc/research/chronology/4-607table1.pdf
- 26 U.S.C. 121, Exclusion of gain from sale of principal residence (U.S. Code, GovInfo): https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapB-partIII-sec121.htm
Sources: the primary documents linked above, read on October 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.