Nebraska fully conforms to federal §168(k) via rolling IRC conformity — STR investors get 100% of the federal bonus deduction on the Nebraska return with no add-back. Federal and state savings stack, delivering extra Year-1 tax relief for property acquired and placed in service after January 19, 2025. See the full 50-state conformity map to compare Nebraska's treatment to every other US jurisdiction.
Modeled on a $150,000 federal §168(k) deduction. Run your own numbers in the Conformity Tool →
How Nebraska adopts §168(k) — the rolling conformity mechanic
Nebraska conforms to the Internal Revenue Code on a rolling basis for individual income tax purposes. When Congress amends the IRC — as it did when the One Big Beautiful Bill Act (OBBBA, P.L. 119-21) restored 100% bonus depreciation permanently for property acquired and placed in service after January 19, 2025 — Nebraska automatically adopts the new federal treatment without needing separate state legislation.
The controlling statute, Neb. Rev. Stat. §77-2716, ties Nebraska taxable income to federal AGI. Because no Nebraska-specific modification is imposed for §168(k), the federal deduction flows through the state return without adjustment.
Nebraska is also in the middle of a scheduled individual income tax rate phase-down — the top rate is 4.55% for 2026 and drops to 3.99% by 2027. That rate change reduces the incremental state benefit over time but doesn't touch conformity.
Worked example — $150,000 federal deduction plus extra Nebraska savings
Consider a Nebraska STR investor with a $150,000 Year-1 §168(k) deduction on a short-term rental acquired and placed in service after January 19, 2025. Assume the investor is in the 37% federal bracket and pays Nebraska's 4.55% top marginal rate.
| Line | Amount | Notes |
|---|---|---|
| Federal §168(k) deduction | $150,000 | OBBBA 100% bonus |
| Federal Y1 tax savings @ 37% | $55,500 | Ordinary bracket |
| Nebraska state deduction | $150,000 | Full conformity, no add-back |
| Nebraska Y1 state tax savings @ 4.55% | $6,825 | 2026 top rate |
| Total Year-1 combined savings | $62,325 | Federal + Nebraska |
Because Nebraska piggybacks on federal AGI, there are no basis differences to track and no separate depreciation schedule to maintain across the property's holding period.
The statute explained
The controlling Nebraska authority is Neb. Rev. Stat. §77-2716, which sets Nebraska taxable income by reference to federal AGI on a rolling basis. Because no adjustment is specified for §168(k) bonus depreciation, the federal deduction reduces Nebraska taxable income dollar-for-dollar.
How Nebraska compares to decoupled states
The contrast with decoupled states is significant. In California, an STR investor with the same $150,000 federal deduction adds back the entire amount on the state return — giving up roughly $19,950 in Year-1 state tax savings at California's 13.3% top rate. Georgia, New York, Pennsylvania, and about two dozen other jurisdictions impose similar 100% add-backs.
Nebraska investors face none of that. The federal deduction flows through unchanged, and the extra $6,825 in state savings stacks on top of the federal $55,500. To compare Nebraska against any decoupled state at any deduction amount, use the state conformity tool.
What this means for your STR purchase decision
Nebraska's full conformity is a real underwriting advantage. When you're evaluating an Omaha, Lincoln, or resort-area Nebraska STR purchase, you can price in both federal and state Year-1 tax savings at underwriting — not just the federal deduction. On a mid-sized property with $150,000 in bonus-eligible components, that's an extra $6,825 in first-year cash flow at the 2026 top rate.
The qualifier: the property must be acquired and placed in service after January 19, 2025 to qualify for OBBBA's 100% federal bonus. Pre-January 19, 2025 acquisitions fall under the earlier phaseout schedule.
Before you make an offer, run the address on your property to see the calibrated Year-1 bonus-eligible dollar amount — DepreciMax reports classify every finish as 5-year, 15-year, or 39-year and quantify the federal plus Nebraska state savings.
Analyze a specific Nebraska property
Run any Nebraska STR listing through DepreciMax's $99 property report — line-item finish classification with Nebraska-specific state impact math.
Frequently asked questions
Do I get bonus depreciation on both my federal and Nebraska return?
Yes. Nebraska conforms to federal §168(k) via rolling IRC conformity under Neb. Rev. Stat. §77-2716. STR investors claim the full federal 100% bonus deduction, and it flows through to the Nebraska return with no add-back. For property acquired and placed in service after January 19, 2025, OBBBA's permanent 100% bonus applies at both the federal and Nebraska levels.
What is Nebraska's top individual income tax rate?
Nebraska has a top individual income tax rate of 4.55% for 2026 and is scheduled to phase down to 3.99% by 2027. On a $150,000 federal §168(k) deduction, a Nebraska STR investor picks up roughly $6,825 in additional Year-1 state tax savings on top of the federal deduction at the current top rate.
Does Nebraska plan to change its §168(k) conformity in 2026?
No public legislation is pending to decouple Nebraska from federal §168(k) for 2026. Because Nebraska ties to federal AGI on a rolling basis, changes would require the legislature to add a new modification — which has not been proposed. The scheduled rate phase-down to 3.99% by 2027 will reduce (but not eliminate) the extra state benefit.
What happens on sale — does Nebraska recapture bonus depreciation?
Nebraska follows federal basis and federal §1245 / §1250 recapture rules because the state allows the full federal §168(k) deduction. There is no separate Nebraska recapture calculation for bonus depreciation; recapture flows through federal AGI to Nebraska taxable income unchanged.
Does Nebraska conformity apply to §179 as well?
Yes. Nebraska conforms to federal §179 expensing at the federal cap without a separate state limit. STR investors can layer §179 (for qualifying tangible personal property) on top of §168(k) at both the federal and Nebraska levels, subject to federal §179 income limits.
Every state's §168(k) position, in one place
Interactive map, sortable table, and deep-dive guide for each of the 51 jurisdictions — post-OBBBA verified.
See the 50-state map →