“… but in this world, nothing can be said to be certain, except death and taxes.”
– Benjamin Franklin.
No truer words are spoken in the case of inheritance tax, although not every state has it. And if you’re wondering, “Does Nebraska have an inheritance tax?” Yes, Nebraska is one of six states that collect inheritance tax.
What is subject to inheritance tax?
Nebraska’s inheritance tax statutes assess a tax against anyone who receives assets from a deceased person (“Decedent”) at the Decedent’s death. The tax applies if the Decedent was a resident of Nebraska at the time of their death or if they own real estate in Nebraska. All personal property and real estate (located in Nebraska) owned by the Decedent at the time of death is subject to tax, excepting life insurance. Additionally, spouses and charities do not pay inheritance tax.
What is the inheritance tax rate in Nebraska?
The rate of tax and applicable exemption amounts depend on the relationship of the beneficiary to the Decedent. Here are some examples:
- A child of a Decedent will receive a $100,000 exemption; the value of any assets received above $100,000 will be taxed at 1%
- A niece or nephew of a Decedent will receive a $40,000 exemption; the value of any assets received above $50,000 will be taxed at 11%
- A non-familial beneficiary will pay 15% tax above a $25,000 exemption
These rates are applicable for the estate of a Decedent who died after January 1, 2023. Lower exemption amounts and higher tax rates apply for Decedents’ estates who died prior to January 1, 2023.
What expenses can be deducted from inheritance tax in Nebraska?
On the inheritance tax worksheet, the filing party can also take deductions for things like attorney fees, accountant fees, other administrative expenses, and paid claims and bills of the Decedent. There are also other applicable deductions that come into play for children, such as an exempt property deduction.
Determination of inheritance tax is a court proceeding in Nebraska. For the initial steps, a petition, inventory and inheritance tax worksheet must be filed in court in the county where the decedent lived at the time of death. The county attorney reviews these documents at the time of submission. If approved, the pleadings are then submitted to the court for approval. Once the order of tax is entered by the judge, the inheritance tax is paid to the county treasurer.
When is inheritance tax due in Nebraska?
An inheritance tax must be filed and paid within one year from the date of the Decedent’s death to avoid penalties and interest. Additionally, a lien is placed on any real estate owned by the Decedent until the tax is paid.
A qualified attorney can answer your questions regarding inheritance tax, be it in your own estate or one where you are a beneficiary.
This article should not be construed as legal advice. Situations are different and it’s impossible to provide legal advice for every situation without knowing the individual facts.
