Nebraska Inheritance Tax 2026: County Rates, Exemptions, LB838
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Quick Answer
Nebraska charges inheritance tax, not estate tax, and charges it heir by heir: 1% on what a close relative receives above $100,000, 11% on what an uncle, aunt, niece or nephew receives above $40,000, and 15% on what anyone else receives above $25,000, for deaths on or after January 1, 2023 (Neb. Rev. Stat. 77-2004, 77-2005 and 77-2006, read October 21, 2026). A surviving spouse and any heir under 22 owe nothing. LB838, signed April 14, 2026, did amend 77-2004 with an operative date of July 18, 2026, but it changed no rate and no exemption: it restructured the list of 1% heirs. The tax is paid to a county, not the state: the county of the decedent’s residence, or the county where Nebraska real estate sits, and the counties collected $92,482,608.90 from July 1, 2024 to June 30, 2025, a third of it from beneficiaries who live outside Nebraska (Department of Revenue). On $500,000 received, the tax is $4,000 for a child, $50,600 for a niece and $71,250 for a friend (our arithmetic).
Key Takeaways
- Three classes, per person: Class 1 (parents, grandparents, siblings, children, lineal descendants, someone treated as a child for ten years, and their spouses) pays 1% over $100,000; Class 2 (uncle, aunt, niece, nephew, their descendants and spouses) pays 11% over $40,000; Class 3 (everyone else, including cousins, friends and unmarried partners) pays 15% over $25,000. The old rates for deaths before January 1, 2023 were 1% over $40,000, 13% over $15,000 and 18% over $10,000.
- LB838 (2026), section 25, amended only 77-2004. The sentence that sets 1% over $100,000 is untouched; the bill strikes an inline list of relatives from subsection (1), moves the list into subsection (2)(a) to (g), and renumbers the exemption paragraph as subsection (3). Sections 77-2005 and 77-2006 are not in the bill. Operative date: July 18, 2026.
- The exemption is a threshold, not a credit: tax is the rate times the amount above it, so a niece receiving $40,000 owes nothing and one receiving $100,000 owes $6,600 (our arithmetic). Any interest passing to a person under 22 is not taxed, in all three classes, and interests passing to a surviving spouse are not taxed.
- Which county: the county of the decedent’s residence, except that real property in another county sends that share to the county where the property sits. A nonresident decedent is taxed on “any part of the property within this state.” The total tax is apportioned among counties by where the gross property is (77-2014).
- Close relatives pay little but there are many of them: Class 1 heirs were 13,494 of the 15,325 beneficiaries who paid in fiscal year 2025 and 61.6% of the tax, an average of $4,223 each; Class 2 heirs averaged $18,544 and Class 3 heirs $22,681 (our arithmetic from the Department of Revenue report).
- Taxable: property passing by will or intestacy, joint property with anyone but a spouse (except what the survivor contributed), and gifts in the three years before death for which a federal gift tax return was required. Life insurance is taxable only “to the extent of the amount receivable by the executor or administrator”; insurance receivable by a trustee is not, unless the estate is the trust’s beneficiary.
- Due twelve months after death. If no proceeding is filed in that time the penalty is 5% a month up to 25% of the unpaid tax; filing the probate petition, or an application for a tentative payment with the payment itself, within twelve months counts as the proceeding.
CSV · 192 rows
Nebraska inheritance tax 2026: the three classes, LB838 section 25, county rules, what is taxed, deadlines, 93-county tax paid in fiscal year 2025 and worked examples
192 rows: 14 on rates and exemptions (current and before 2023), 7 on LB838, 8 on deadlines and penalties, 5 on which county is paid, 7 on what is taxed, 2 on Form PCIT, 27 statewide fiscal year 2025 rows, 93 county rows with tax paid, resident and nonresident beneficiaries, and 29 rows of ladders and examples (our arithmetic).
What LB838 changed in section 77-2004, and what it did not
LB838 is a long omnibus bill, approved by the Governor on April 14, 2026, that covers money transmitters, financial exploitation of vulnerable adults, civil procedure, decedents’ estates, the trust code, deceptive trade practices and more. Only section 25 touches inheritance tax. We compared the bill, in which deleted words are struck through, with the statute page the Legislature posts for 77-2004, which now ends “Laws 2026, LB838, § 25. Operative Date: July 18, 2026”. Section 40 of the bill makes section 25 operative three calendar months after the Legislature adjourned.
| Item | Text the bill amends (Cumulative Supplement 2024) | Text after LB838 (operative July 18, 2026) |
|---|---|---|
| Rate for Class 1 heirs | 1% of the value received above $100,000, for deaths on or after January 1, 2023 | Unchanged: 1% above $100,000 |
| Where the list of 1% heirs sits | Written inside subsection (1): father, mother, grandparents, brother, sister, son, daughter, descendants, a person treated as a child for ten years, “or the spouse or surviving spouse of any such persons” | Subsection (1) refers to subsection (2), which lists persons (a) to (g) |
| Descendants of a person treated as a child | Not named separately in the struck sentence | Named in (2)(e) and (2)(f), with the spouse of any of (a) to (f) in (2)(g) |
| Exemption paragraph (interests at or below the threshold, homestead allowance, spouse, under 22) | Numbered subsection (2) | Renumbered subsection (3); the under-22 rule now cites subsection (2) |
| Section 77-2005 (11%, $40,000) and 77-2006 (15%, $25,000) | Not in the bill | Not in the bill |
Two readings, both ours. First, the money did not move: nobody’s rate or exemption changed on July 18, 2026, and a death in 2026 is taxed the same way as a death in 2023, 2024 or 2025. Second, the third row is the only place the text could matter: the amended list names the descendants of a person the decedent treated as a child for ten years, and their spouses, as 1% heirs, and the sentence the bill strikes does not name them. Whether a court would already have placed them in Class 1 under “any lineal descendant” is a question for the estate’s attorney. The 2023 change that matters was LB310, which raised the exemptions and cut the rates for deaths from January 1, 2023, and our list of states with an estate tax or an inheritance tax already uses those figures. Nebraska differs from its neighbors in the inheritance-tax group in two ways: the tax is collected by 93 counties, and there are only three classes with a flat rate and a per-person exemption, where Pennsylvania taxes from the first dollar at 4.5%, 12% or 15%, New Jersey has waiver forms for each asset, and Maryland pairs its inheritance tax with an estate tax.
The three classes and what each heir pays
Nebraska has no brackets inside a class: the rate is flat and the exemption is subtracted once, per person. That makes the tax easy to compute and very sensitive to who inherits. The table is the ladder the law-firm pages we checked do not print.
| Received by one heir | Class 1 (1% over $100,000) | Class 2 (11% over $40,000) | Class 3 (15% over $25,000) |
|---|---|---|---|
| $100,000 | $0 | $6,600 | $11,250 |
| $250,000 | $1,500 | $23,100 | $33,750 |
| $500,000 | $4,000 | $50,600 | $71,250 |
| $1,000,000 | $9,000 | $105,600 | $146,250 |
| $2,000,000 | $19,000 | $215,600 | $296,250 |
| $5,000,000 | $49,000 | $545,600 | $746,250 |
All cells are our arithmetic from the three statutes: rate times the amount above the exemption. At $1,000,000 the effective rate is 0.9% for a child, 10.6% for a niece and 14.6% for a friend. Our hub shows the same law on one $6,000,000 example, $59,000 for a close relative and $655,600 for a niece.
Who is in which class, from the statutes:
- Class 1 (77-2004): father, mother, grandfather, grandmother, brother, sister, son, daughter, a legally adopted child, any lineal descendant, and “any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent,” plus the spouses of these. The statute’s annotations say that person need not be a blood relative, and list seven factors a court weighs: the family, support, parental authority, blood or marriage, guidance, time and affection, and written documentation.
- Class 2 (77-2005): an uncle, aunt, niece or nephew “related to the deceased by blood or legal adoption,” their other lineal descendants, and the spouse of any of them.
- Class 3 (77-2006): “all other cases.” Cousins, friends, an unmarried partner, and a charity that does not qualify for an exemption.
- Stepfamily rule (77-2005.01): for Classes 1 and 2, “relatives of the decedent” include relatives of a spouse the decedent was married to at death, and relatives of a former spouse the decedent was married to at that spouse’s death. Our reading is that this puts a spouse’s children and relatives in the same class as the decedent’s own; a will that leaves property to a stepchild should be checked against it.
- Not taxed: interests passing to the surviving spouse; any interest passing to a person under 22; property transferred to the United States, Nebraska or a local government (77-2007.03); and gifts to religious, charitable, public, scientific or educational organizations that meet the conditions of 77-2007.04.
What is taxed: insurance, joint property, gifts and fund shares
Section 77-2001 taxes property that passes by will or by intestacy from a Nebraska resident, and, for a nonresident, “any part of the property within this state.” Section 77-2002 reaches transfers that do not go through the will. Here is how the statutes treat the assets a rental-property or fund owner usually holds.
| Asset | Taxed? | What the statute says | Section |
|---|---|---|---|
| Life insurance payable to the estate | Yes, to the extent it is receivable by the executor or administrator | Included in property passing by will or intestacy | 77-2001 |
| Life insurance payable to a trustee | No, unless the estate is the beneficiary of the trust | “Proceeds of life insurance receivable by a trustee” are not subject to inheritance tax | 77-2002(3) |
| Life insurance payable to a named person | Not named in the sections we read | The statutes tax insurance receivable by the executor and exempt insurance receivable by a trustee; ask counsel how a named individual beneficiary is treated | 77-2001, 77-2002 |
| Property held jointly with a person other than a spouse | Yes, except the part the survivor can show was originally theirs | If the decedent gave the survivor any part for less than full consideration, only the survivor’s proportional contribution is excepted; if the owners acquired by gift or inheritance with no fixed shares, the value is divided by the number of owners | 77-2002(1)(d) |
| Transfer on death deed, trust or other transfer taking effect at death | Yes | Transfers “intended to take effect in possession or enjoyment, after his or her death” or by reason of death are taxed. Form PCIT lists a beneficiary of a transfer on death deed among petitioners | 77-2002(1)(b), (c); Form PCIT |
| Gifts in the three years before death | Yes, if a federal gift tax return was required | Treated as made in contemplation of death; transfers earlier than three years are not | 77-2002(2) |
| Employer benefit plan payments | Only to the extent not excluded | Exempt if the benefit is excluded life insurance or is not subject to federal estate tax under section 2039 of the Internal Revenue Code | 77-2007 |
| IRA or non-traded fund shares | Not named in the sections we read | No Nebraska statute we read names an IRA or a non-traded REIT, BDC or interval fund; our reading is that a named-beneficiary transfer falls under 77-2002(1)(c), so ask counsel | 77-2002 |
| Personal property of a nonresident decedent | Often not payable | Not payable if the decedent’s state taxes no personal property of Nebraska residents, or has a reciprocal exemption; tangible property with a Nebraska situs is excepted | 77-2007.01 |
| Real property in Nebraska owned by a nonresident decedent | Yes | “Any part of the property within this state” and the county where it is situated | 77-2001, 77-2014 |
For a rental owner the practical points are three. A deed that names a niece as joint owner of a rental you bought alone leaves the whole value in her Class 2 share. A transfer on death deed or a trust is not an escape from the tax, because 77-2002 reaches transfers at death. And the three-year gift rule links to the federal gift tax return, so the annual gift tax exclusion and Form 709 for illiquid real estate interests decide which gifts count. For a decedent who owned shares of a fund that has stopped repurchasing, see how repurchase rules treat an heir. Tax on an inherited IRA is a separate federal question covered in our inherited IRA page, and the basis of an inherited rental is on our step-up in basis page.
Which county gets the tax, and what the county reports show
Section 77-2014 says the tax goes to the treasurer of the “proper county,” defined as the county of the decedent’s residence, with two exceptions: when the decedent had an interest in real property in another county, “the words proper county shall mean the county in which the real property is situated,” and for personal property listed for property tax, the county where it is listed and assessed. When the decedent is a nonresident, the same rules apply and any other Nebraska property goes to the county where it is located. The total tax is then apportioned among the counties in the ratio of the gross property in each. The executor or trustee pays within 30 days after retaining or receiving the money, and the treasurer gives a receipt.
Since 2022, Nebraska counties must report what they collect, and the Department of Revenue publishes it each year (Neb. Rev. Stat. 77-2015). The report for July 1, 2024 to June 30, 2025, published August 25, 2025 and revised September 12, 2025, is a table by county and class. We checked it: the 93 county totals add up to the statewide figure, $92,482,608.90, to the cent.
| County | Total tax paid, FY2025 | Share of state total | Paid by nonresident heirs |
|---|---|---|---|
| Douglas | $17,628,491.31 | 19.1% | 36% |
| Lancaster | $9,762,715.94 | 10.6% | 43% |
| Sarpy | $7,235,197.37 | 7.8% | 46% |
| Polk | $2,972,403.74 | 3.2% | 12% |
| Adams | $2,579,542.00 | 2.8% | 29% |
| Dodge | $2,352,804.11 | 2.5% | 28% |
| Platte | $2,326,389.55 | 2.5% | 14% |
| Buffalo | $2,165,058.13 | 2.3% | 27% |
| Hall | $2,088,759.62 | 2.3% | 33% |
| Gage | $1,735,146.24 | 1.9% | 15% |
Shares and percentages are our arithmetic from the Department’s totals. The three largest counties took 37.4% of the state total, the top five 43.4% and the top ten 55.0%; 24 of 93 counties collected more than $1,000,000, the median county $426,857.14, 20 counties under $100,000, and Blaine County reported nothing. Who pays also varies sharply by county: in Kearney County 60.6% of the tax came from nonresident heirs ($994,211.72 of $1,639,782.05), and in Chase County a single Class 3 beneficiary paid $611,581.34, more than the Class 1 and Class 2 heirs of the county combined. The county rows in the CSV carry resident and nonresident beneficiary counts for all 93.
Statewide, the class split explains why the rates look gentle and the bills do not:
| Class | Beneficiaries who paid, FY2025 | Tax paid | Share of tax | Average per beneficiary (our arithmetic) |
|---|---|---|---|---|
| Class 1 (1%) | 13,494 (9,664 resident, 3,830 nonresident) | $56,981,428.23 | 61.6% | $4,223 |
| Class 2 (11%) | 1,457 (902 resident, 555 nonresident) | $27,018,303.78 | 29.2% | $18,544 |
| Class 3 (15%) | 374 (275 resident, 99 nonresident) | $8,482,876.89 | 9.2% | $22,681 |
| All | 15,325 (10,841 resident, 4,484 nonresident) | $92,482,608.90 | 100% | $6,035 |
Resident beneficiaries paid $61,746,760.65 and nonresident beneficiaries $30,735,848.25, so a third of the money (33.2%, our arithmetic) was paid by heirs who do not live in Nebraska. The Department’s report counts tax paid in each fiscal year, not tax assessed on deaths in that year, so it lags the deaths. Under the statute the Department was due to publish the fiscal year 2026 report (July 1, 2025 to June 30, 2026) by September 1, 2026; we could not find it on the Department’s page on October 21, 2026.
How a Nebraska estate pays: the county court, the 12-month clock and Form PCIT
Nebraska has no state-level return. The tax is determined by the county court, either inside the probate (a Chapter 30 proceeding) or in a proceeding opened only to determine the tax; it can be started by the court, the personal representative, the county attorney or anyone with a legal interest (77-2018.01). The court appoints an appraiser or the county judge appraises at fair market value, assesses the tax, and an appeal goes to the Court of Appeals (77-2020 to 77-2023). We did not find an official “Form 500” for this; the only Department of Revenue form we found is below.
| Step or deadline | Rule | Section |
|---|---|---|
| Tax due | Twelve months after death; interest accrues from then at the rate in section 45-104.01 | 77-2010 |
| Penalty | 5% per month or fraction of a month, up to 25% of the unpaid tax, for not filing a proceeding to determine the tax within twelve months; the county court may abate it for good cause | 77-2010 |
| What stops the penalty | A probate petition or application, or an application for a tentative payment, plus payment of the tentative tax, within twelve months | 77-2010, 77-2018.07 |
| Tentative payment | Written application to the county court before final determination; the county attorney has seven days to say what sum he or she requests; it applies to probate and nonprobate estates and is not a final order | 77-2018.07 |
| Pay the treasurer | Within thirty days after the tax is retained or paid to the executor, administrator or trustee | 77-2014 |
| Who is liable | Heirs, legatees and devisees, personal representatives, other recipients and trustees, until paid; the tax is a lien on real property | 77-2003 |
| Lien ends | Ten years from death, or five years after a determination made within the ten, or on payment | 77-2037 |
| Refund of an erroneous payment | Application to the county court within two years of payment | 77-2018 |
| Report to the county | Form PCIT, Petitioner’s County Inheritance Tax Report, due when the court enters an order determining the tax; no tax may be paid or refunded before it is submitted | 77-2015; Form PCIT |
A will or an instrument signed during life may direct who bears the tax (77-2038); otherwise the computation is made without regard to Nebraska inheritance tax apportionment (77-2005.01). If a legacy is charged on real estate, the heir deducts the tax before paying it (77-2012). The executor has the power to sell property to pay the tax (77-2013), which matters when the estate is a rental and a fund that cannot be sold in twelve months.
Worked examples (our arithmetic)
One estate, three heirs. A resident leaves $1,000,000: $600,000 to a daughter, $200,000 to a niece and $200,000 to a friend. The daughter owes 1% of $500,000, which is $5,000; the niece 11% of $160,000, which is $17,600; the friend 15% of $175,000, which is $26,250. Total: $48,850. The same $1,000,000 left to the daughter alone would cost $9,000. The rental and the fund shares in the same estate do not change this arithmetic; they change where the cash to pay it comes from.
One estate, two counties. A Lancaster County resident leaves everything to a niece: $1,000,000 of gross property, of which $700,000 is in Lancaster County and a $300,000 rental is in Hall County. The tax is 11% of $960,000, which is $105,600. Apportioned by where the gross property sits under 77-2014(3), Lancaster receives $73,920 and Hall $31,680. This uses the simple ratio in the statute; the statute’s ratio language also refers to exclusions in other sections, so a real apportionment can differ.
A rental made joint. A landlord buys a $400,000 rental alone and later adds a niece as joint owner for no payment. At death the whole $400,000 is taxable to her under 77-2002(1)(d): 11% of $360,000, or $39,600. If the joint owner were an adult child instead: 1% of $300,000, or $3,000.
A gift two years before death. A $300,000 gift of a rental share to a nephew, with a federal gift tax return required, is treated as made in contemplation of death. His tax is 11% of $260,000, or $28,600, if he receives nothing else.
Age 22. A grandchild aged 20 who inherits $500,000 owes $0; at 22 the same inheritance costs 1% of $400,000, or $4,000.
A missed deadline. If $50,600 of tax is unpaid and no proceeding was filed, the penalty reaches the 25% cap in the fifth month: $12,650, plus interest.
What a reader can do with this
- Find the class of each heir before anything else. A niece or nephew pays 11% above $40,000 and a friend pays 15% above $25,000, against 1% above $100,000 for a child. On a $500,000 rental, a will that moves it from a child to a niece moves the tax from $4,000 to $50,600.
- Count the 22-year line. Anyone under 22 at the date of the interest passing owes nothing, whatever the class; on a large bequest to a younger heir the date matters.
- List every joint title and every transfer on death deed, and every gift in the last three years that needed a federal gift tax return. They are all in the base.
- Check the county for each parcel. A Nebraska rental outside the county of residence sends its share to the county where it sits, and an out-of-state heir pays the same rate as a resident.
- Ask the attorney for a tentative payment plan. The twelve-month clock penalizes not filing, not owing; a probate petition or a tentative payment application within twelve months stops the penalty.
- Plan the cash. A tax of $50,000 to $100,000 on a niece’s share is due in twelve months, and a non-traded fund or a rental may not be saleable by then.
This is analysis of public documents, not investment, legal or tax advice.
FAQ
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When a rate, rule or filing behind this page changes: what changed, the one number that matters, and the source to check it yourself.
Sources, read and saved on October 21, 2026: Nebraska Revised Statutes 77-2001, 77-2002, 77-2003, 77-2004, 77-2005, 77-2005.01, 77-2006, 77-2007, 77-2007.01, 77-2007.03, 77-2007.04, 77-2010, 77-2012, 77-2013, 77-2014, 77-2015, 77-2018, 77-2018.01, 77-2018.07, 77-2020 to 77-2024, 77-2037 and 77-2038 (nebraskalegislature.gov, read through the Internet Archive); LB838 (2026), slip law approved April 14, 2026, section 25 and sections 40 and 44; Nebraska Department of Revenue, Annual Report of County Inheritance Taxes Paid, July 1, 2024 to June 30, 2025 (published August 25, 2025, revised September 12, 2025); the Department’s County Inheritance Tax Report page and Form PCIT, Petitioner’s County Inheritance Tax Report (rev. 6-2024). We saved the statutes and the report as text; we did not find the fiscal year 2026 report. Ladders, shares, averages and examples are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.
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