Updated October 5, 2026. Quick answer: Yes. Nebraska starts from federal adjusted gross income and taxes interest and dividends on graduated rates, with a 2025 top rate of 5.20% and 4.55% from 2026 in the Department’s rate chronology. For “For non-Nebraska obligations enter the total interest or dividend income” is added back, and Nebraska bond interest is subtracted.
How Nebraska treats dividends and interest
| Item | What the documents say |
|---|---|
| Treatment | Taxed on the graduated schedule |
| 2025 rates | 2.46% to 5.20%; the booklet’s worksheet for income above the last bracket reads “Add $3,566 plus 5.20%” |
| 2026 rates | The Department’s chronology row reads “Jan. 1, 2026 7 2.46% 3.51% 4.55% 4.55%”, so the top rate falls to 4.55%; the document does not name the enacting bill |
| Nebraska bonds | Schedule I line 2 subtracts “Exempt Interest Income from Nebraska Obligations.” |
| U.S. obligations | Interest and dividends on U.S. obligations are deducted on line 15, and “Capital gains from the sale of U.S. obligations are not deductible.” |
| Mutual funds | “Regulated Investment Company Dividends from U.S. Obligations.” are deducted using the fund’s statement of the exempt percentage |
A $20,000 example
Taxable dividends and interest of $20,000 taxed wholly at the 2025 top rate, 5.20%, would add $20,000 x 5.20% = $1,040; at the 2026 top rate, 4.55%, $20,000 x 4.55% = $910. Lower brackets apply to lower income.
What changes in 2026
The Department’s rate chronology lists a January 1, 2026 row whose top rate is 4.55%, down from 5.20%. It does not name the law that made the change.
Federal rules
The state’s treatment sits on top of the federal one. Qualified dividends and ordinary dividends are sorted out on the Form 1099-DIV, as the site explains in Box 1a and 1b: ordinary versus qualified dividends, and interest is reported as covered in 1099-INT Box 1. The IRS explains the federal side in Topic no. 403, Interest Received and Topic no. 404, Dividends.
Related: whether Nebraska taxes capital gains, whether Nebraska taxes pensions, how Nebraska taxes retirement income, dividends and interest tax by state, and how tax-exempt interest is reported.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for your investments
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor weighs your portfolio
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 Nebraska Individual Income Tax and Amended Return Booklet (8-307-2025): https://revenue.nebraska.gov/sites/default/files/doc/tax-forms/2025/f_1040n_booklet_2025.pdf
- Nebraska Tax Rate Chronologies: https://revenue.nebraska.gov/sites/default/files/doc/research/ne_tax_rate_chronology.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.