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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 938
Introduced by Hallstrom, 1; Bosn, 25; Ibach, 44; Sorrentino, 39.
Read first time January 09, 2026
Committee: Revenue
A BILL FOR AN ACT relating to revenue and taxation; to amend section1
77-2716, Revised Statutes Supplement, 2025; to adopt the First-Time2
Home Buyer Savings Account Act; to provide for income tax3
adjustments as prescribed; and to repeal the original section.4
Be it enacted by the people of the State of Nebraska,5
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Section 1. Sections 1 to 8 of this act shall be known and may be1
cited as the First-Time Home Buyer Savings Account Act.2
Sec. 2. The Legislature declares that the purpose of allowing3
taxable income to be reduced by contributions to and earnings from a4
first-time home buyer savings account is to encourage first-time home5
ownership through incentivizing saving for a down payment and closing6
costs because of the significant financial and civic benefits home7
ownership provides for this state. 8
Sec. 3. For purposes of the First-Time Home Buyer Savings Account9
Act: 10
(1) Account holder means an individual who establishes an account11
with a financial institution that is designated as a first-time home12
buyer savings account; 13
(2) Department means the Department of Revenue;14
(3) Eligible expenses means a down payment and any closing costs15
included on a real estate settlement statement, including, but not16
limited to, appraisal fees, mortgage origination fees, and inspection17
fees or any down payment costs and fees that may be included as part of18
financing the construction of a primary residence;19
(4) Financial institution means a bank, savings bank, building and20
loan association, savings and loan association, or credit union, whether21
chartered by the United States, the Department of Banking and Finance, or22
a foreign state agency; any other similar organization which is covered23
by federal deposit insurance; or a trust company; 24
(5) First-time home buyer means an individual who:25
(a) Has never owned or purchased under contract for deed, either26
individually or jointly, a single-family, owner-occupied primary27
residence, including, but not limited to, a condominium unit or a28
manufactured or mobile home that is assessed and taxed as real property;29
or 30
(b) As a result of the individual's dissolution of marriage, has not31
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been listed on a property title for at least three consecutive years or1
more; 2
(6) First-time home buyer savings account or account means an3
account with a financial institution designated as a first-time home4
buyer savings account in accordance with section 4 of this act; and5
(7) Qualified beneficiary means a first-time home buyer designated6
by an account holder for whom the money in a first-time home buyer7
savings account is or will be used for eligible expenses for the purchase8
of the qualified beneficiary's primary residence. 9
Sec. 4. (1) Beginning January 1, 2027, any individual may open an10
account with a financial institution and designate the account, in its11
entirety, as a first-time home buyer savings account to be used to pay or12
reimburse a qualified beneficiary's eligible expenses for the purchase or13
construction of a primary residence in Nebraska. An individual may be the14
account holder of multiple accounts, and an individual may jointly own15
the account with another person if they file a joint income tax return.16
To be eligible for the subtraction under subsection (27) of section17
77-2716, an account holder must comply with the requirements of this18
section. 19
(2) An account holder must designate, no later than April 15 of the20
year following the taxable year during which the account is established,21
a first-time home buyer as the qualified beneficiary of the first-time22
home buyer savings account. The account holder may designate himself or23
herself as the qualified beneficiary. The account holder may change the24
designated qualified beneficiary at any time, but there shall not be more25
than one qualified beneficiary at any time. An account holder shall not26
have multiple accounts with the same qualified beneficiary, but an27
individual may be designated as the qualified beneficiary of multiple28
accounts. 29
(3) The following limits apply to a first-time home buyer savings30
account: 31
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(a) The maximum contribution to a first-time home buyer savings1
account for a taxable year is five thousand dollars for an individual and2
ten thousand dollars for account holders who file a joint return; and3
(b) The maximum amount of all contributions for all taxable years to4
a first-time home buyer savings account is twenty-five thousand dollars5
for an individual and fifty thousand dollars for account holders who file6
a joint return. 7
(4) Money may remain in a first-time home buyer savings account for8
unlimited duration without the contributions being subject to recapture9
or penalty. 10
(5) The account holder shall not use money in an account to pay11
expenses of administering the account, except that a service fee may be12
deducted from the account by a financial institution.13
(6) The account holder is responsible for maintaining documentation14
for the first-time home buyer savings account and for eligible expenses15
related to the qualified beneficiary's purchase of his or her primary16
residence. 17
Sec. 5. (1)(a) The money in a first-time home buyer savings account18
may be: 19
(i) Used for eligible expenses related to a qualified beneficiary's20
purchase or construction of his or her primary residence in this state;21
(ii) Used for eligible expenses related to a qualified beneficiary's22
purchase or construction of his or her primary residence in or outside23
the state if the qualified beneficiary is active-duty military and was24
stationed in Nebraska for any time after the creation of the account;25
(iii) Used for expenses that would have qualified under subdivision26
(1)(a)(i) or (ii) of this section, but the contract for purchase or27
construction did not close; 28
(iv) Transferred to another newly created first-time home buyer29
savings account; or 30
(v) Used to pay a service fee that is assessed and deducted by the31
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financial institution. 1
(b) Subdivision (1)(a) of this section applies regardless of whether2
the qualified beneficiary is the sole owner of the primary residence or a3
joint owner with another person who does not qualify as a qualified4
beneficiary. 5
(c) The money in a first-time home buyer savings account may not be6
used for the purposes described in subdivisions (1)(a)(i), (ii), and7
(iii) of this section if the primary residence being purchased or8
constructed is a manufactured or mobile home that is not taxed as real9
property. 10
(2)(a) Money withdrawn from a first-time home buyer savings account11
is subject to recapture in the taxable year in which it is withdrawn if:12
(i) At the time of the withdrawal, it has been less than a year13
since the first deposit in the first-time home buyer savings account; or14
(ii) The money is used for any purpose other than those authorized15
in subsection (1) of this section. 16
(b) The amount subject to recapture shall be added to federal17
adjusted gross income pursuant to subdivision (27)(b) of section 77-2716.18
(3) If any money is subject to recapture pursuant to subdivision (2)19
(a)(ii) of this section, the account holder shall pay to the department a20
penalty in the same taxable year as the recapture. If the withdrawal is21
made ten or fewer years after the first deposit in the first-time home22
buyer savings account, the penalty is equal to five percent of the amount23
subject to recapture. If the withdrawal is made more than ten years after24
the first deposit in the account, the penalty is equal to ten percent of25
the amount subject to recapture. The penalties provided in this26
subsection do not apply if: 27
(a) The money is used for eligible expenses related to a qualified28
beneficiary's purchase or construction of his or her primary residence29
outside of the state; or 30
(b) The money is from a first-time home buyer savings account for31
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which the qualified beneficiary dies and the account holder does not1
designate a new qualified beneficiary during the same taxable year.2
(4) If the account holder or, if the first-time home buyer savings3
account is jointly owned, the account holders die, all of the money in4
the account that was subtracted from taxable income is subject to5
recapture in the taxable year of the death or deaths, but no penalty is6
due to the department. 7
Sec. 6. The department shall establish a form for an account holder8
to annually report information about a first-time home buyer savings9
account, including, but not limited to, how the money from the account is10
used, and shall identify any supporting documentation that is required to11
be maintained. To be eligible for the subtraction in subsection (27) of12
section 77-2716, an account holder must annually file with his or her13
state income tax return the completed form, the 1099 form for the account14
issued by the financial institution, and any other supporting15
documentation the department requires. 16
Sec. 7. (1) A financial institution is not required to:17
(a) Designate an account as a first-time home buyer savings account,18
or designate the qualified beneficiaries of an account, in the financial19
institution's account contracts or systems or in any other way;20
(b) Track the use of money withdrawn from a first-time home buyer21
savings account; or 22
(c) Report any information to the department or any other23
governmental agency that is not otherwise required by law.24
(2) A financial institution is not responsible or liable for:25
(a) Determining or ensuring that an account holder is eligible for a26
subtraction under subsection (27) of section 77-2716;27
(b) Determining or ensuring that money in the account is used for an28
eligible expense; or 29
(c) Reporting or remitting taxes or penalties related to the use of30
money in a first-time home buyer savings account. 31
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(3) In implementing the First-Time Home Buyer Savings Account Act,1
the department shall not establish any administrative, reporting, or2
other requirements on financial institutions that are outside the scope3
of normal account procedures. 4
Sec. 8. The department may adopt and promulgate rules and5
regulations to carry out the First-Time Home Buyer Savings Account Act.6
Sec. 9. Section 77-2716, Revised Statutes Supplement, 2025, is7
amended to read: 8
77-2716 (1) The following adjustments to federal adjusted gross9
income or, for corporations and fiduciaries, federal taxable income shall10
be made for interest or dividends received: 11
(a)(i) There shall be subtracted interest or dividends received by12
the owner of obligations of the United States and its territories and13
possessions or of any authority, commission, or instrumentality of the14
United States to the extent includable in gross income for federal income15
tax purposes but exempt from state income taxes under the laws of the16
United States; and 17
(ii) There shall be subtracted interest received by the owner of18
obligations of the State of Nebraska or its political subdivisions or19
authorities which are Build America Bonds to the extent includable in20
gross income for federal income tax purposes; 21
(b) There shall be subtracted that portion of the total dividends22
and other income received from a regulated investment company which is23
attributable to obligations described in subdivision (a) of this24
subsection as reported to the recipient by the regulated investment25
company; 26
(c) There shall be added interest or dividends received by the owner27
of obligations of the District of Columbia, other states of the United28
States, or their political subdivisions, authorities, commissions, or29
instrumentalities to the extent excluded in the computation of gross30
income for federal income tax purposes except that such interest or31
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dividends shall not be added if received by a corporation which is a1
regulated investment company; 2
(d) There shall be added that portion of the total dividends and3
other income received from a regulated investment company which is4
attributable to obligations described in subdivision (c) of this5
subsection and excluded for federal income tax purposes as reported to6
the recipient by the regulated investment company; and7
(e)(i) Any amount subtracted under this subsection shall be reduced8
by any interest on indebtedness incurred to carry the obligations or9
securities described in this subsection or the investment in the10
regulated investment company and by any expenses incurred in the11
production of interest or dividend income described in this subsection to12
the extent that such expenses, including amortizable bond premiums, are13
deductible in determining federal taxable income. 14
(ii) Any amount added under this subsection shall be reduced by any15
expenses incurred in the production of such income to the extent16
disallowed in the computation of federal taxable income.17
(2) There shall be allowed a net operating loss derived from or18
connected with Nebraska sources computed under rules and regulations19
adopted and promulgated by the Tax Commissioner consistent, to the extent20
possible under the Nebraska Revenue Act of 1967, with the laws of the21
United States. For a resident individual, estate, or trust, the net22
operating loss computed on the federal income tax return shall be23
adjusted by the modifications contained in this section. For a24
nonresident individual, estate, or trust or for a partial-year resident25
individual, the net operating loss computed on the federal return shall26
be adjusted by the modifications contained in this section and any27
carryovers or carrybacks shall be limited to the portion of the loss28
derived from or connected with Nebraska sources. 29
(3) There shall be subtracted from federal adjusted gross income for30
all taxable years beginning on or after January 1, 1987, the amount of31
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any state income tax refund to the extent such refund was deducted under1
the Internal Revenue Code, was not allowed in the computation of the tax2
due under the Nebraska Revenue Act of 1967, and is included in federal3
adjusted gross income. 4
(4) Federal adjusted gross income, or, for a fiduciary, federal5
taxable income shall be modified to exclude the portion of the income or6
loss received from a small business corporation with an election in7
effect under subchapter S of the Internal Revenue Code or from a limited8
liability company organized pursuant to the Nebraska Uniform Limited9
Liability Company Act that is not derived from or connected with Nebraska10
sources as determined in section 77-2734.01. 11
(5) There shall be subtracted from federal adjusted gross income or,12
for corporations and fiduciaries, federal taxable income dividends13
received or deemed to be received from corporations which are not subject14
to the Internal Revenue Code. 15
(6) There shall be subtracted from federal taxable income a portion16
of the income earned by a corporation subject to the Internal Revenue17
Code of 1986 that is actually taxed by a foreign country or one of its18
political subdivisions at a rate in excess of the maximum federal tax19
rate for corporations. The taxpayer may make the computation for each20
foreign country or for groups of foreign countries. The portion of the21
taxes that may be deducted shall be computed in the following manner:22
(a) The amount of federal taxable income from operations within a23
foreign taxing jurisdiction shall be reduced by the amount of taxes24
actually paid to the foreign jurisdiction that are not deductible solely25
because the foreign tax credit was elected on the federal income tax26
return; 27
(b) The amount of after-tax income shall be divided by one minus the28
maximum tax rate for corporations in the Internal Revenue Code; and29
(c) The result of the calculation in subdivision (b) of this30
subsection shall be subtracted from the amount of federal taxable income31
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used in subdivision (a) of this subsection. The result of such1
calculation, if greater than zero, shall be subtracted from federal2
taxable income. 3
(7) Federal adjusted gross income shall be modified to exclude any4
amount repaid by the taxpayer for which a reduction in federal tax is5
allowed under section 1341(a)(5) of the Internal Revenue Code.6
(8)(a) Federal adjusted gross income or, for corporations and7
fiduciaries, federal taxable income shall be reduced, to the extent8
included, by income from interest, earnings, and state contributions9
received from the Nebraska educational savings plan trust as provided in10
sections 77-1415 to 77-1430 and any account established under the11
achieving a better life experience program as provided in sections12
77-1401 to 77-1409. 13
(b) Federal adjusted gross income or, for corporations and14
fiduciaries, federal taxable income shall be reduced by any contributions15
as a participant in the Nebraska educational savings plan trust, any16
contributions to an account established under the achieving a better life17
experience program made for the benefit of a beneficiary as provided in18
sections 77-1401 to 77-1409, or any contributions to the Give to Enable19
Support Cash Fund as provided in the Give to Enable Support Act, to the20
extent not deducted for federal income tax purposes, but not to exceed21
five thousand dollars per married filing separate return or ten thousand22
dollars for any other return. With respect to a qualified rollover within23
the meaning of section 529 of the Internal Revenue Code from another24
state's plan, any interest, earnings, and state contributions received25
from the other state's educational savings plan which is qualified under26
section 529 of the code shall qualify for the reduction provided in this27
subdivision. For contributions by a custodian of a custodial account28
including rollovers from another custodial account, the reduction shall29
only apply to funds added to the custodial account after January 1, 2014.30
(c) For taxable years beginning or deemed to begin on or after31
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January 1, 2021, under the Internal Revenue Code of 1986, as amended,1
federal adjusted gross income shall be reduced, to the extent included in2
the adjusted gross income of an individual, by the amount of any3
contribution made by the individual's employer into an account under the4
Nebraska educational savings plan trust owned by the individual, not to5
exceed five thousand dollars per married filing separate return or ten6
thousand dollars for any other return. 7
(d) Federal adjusted gross income or, for corporations and8
fiduciaries, federal taxable income shall be increased by:9
(i) The amount resulting from the cancellation of a participation10
agreement refunded to the taxpayer as a participant in the Nebraska11
educational savings plan trust to the extent previously deducted under12
subdivision (8)(b) of this section; and 13
(ii) The amount of any withdrawals by the owner of an account14
established under the achieving a better life experience program as15
provided in sections 77-1401 to 77-1409 for nonqualified expenses to the16
extent previously deducted under subdivision (8)(b) of this section.17
(9)(a) For income tax returns filed after September 10, 2001, for18
taxable years beginning or deemed to begin before January 1, 2006, under19
the Internal Revenue Code of 1986, as amended, federal adjusted gross20
income or, for corporations and fiduciaries, federal taxable income shall21
be increased by eighty-five percent of any amount of any federal bonus22
depreciation received under the federal Job Creation and Worker23
Assistance Act of 2002 or the federal Jobs and Growth Tax Act of 2003,24
under section 168(k) or section 1400L of the Internal Revenue Code of25
1986, as amended, for assets placed in service after September 10, 2001,26
and before December 31, 2005. 27
(b) For a partnership, limited liability company, cooperative,28
including any cooperative exempt from income taxes under section 521 of29
the Internal Revenue Code of 1986, as amended, limited cooperative30
association, subchapter S corporation, or joint venture, the increase31
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shall be distributed to the partners, members, shareholders, patrons, or1
beneficiaries in the same manner as income is distributed for use against2
their income tax liabilities. 3
(c) For a corporation with a unitary business having activity both4
inside and outside the state, the increase shall be apportioned to5
Nebraska in the same manner as income is apportioned to the state by6
section 77-2734.05. 7
(d) The amount of bonus depreciation added to federal adjusted gross8
income or, for corporations and fiduciaries, federal taxable income by9
this subsection shall be subtracted in a later taxable year. Twenty10
percent of the total amount of bonus depreciation added back by this11
subsection for tax years beginning or deemed to begin before January 1,12
2003, under the Internal Revenue Code of 1986, as amended, may be13
subtracted in the first taxable year beginning or deemed to begin on or14
after January 1, 2005, under the Internal Revenue Code of 1986, as15
amended, and twenty percent in each of the next four following taxable16
years. Twenty percent of the total amount of bonus depreciation added17
back by this subsection for tax years beginning or deemed to begin on or18
after January 1, 2003, may be subtracted in the first taxable year19
beginning or deemed to begin on or after January 1, 2006, under the20
Internal Revenue Code of 1986, as amended, and twenty percent in each of21
the next four following taxable years. 22
(10) For taxable years beginning or deemed to begin on or after23
January 1, 2003, and before January 1, 2006, under the Internal Revenue24
Code of 1986, as amended, federal adjusted gross income or, for25
corporations and fiduciaries, federal taxable income shall be increased26
by the amount of any capital investment that is expensed under section27
179 of the Internal Revenue Code of 1986, as amended, that is in excess28
of twenty-five thousand dollars that is allowed under the federal Jobs29
and Growth Tax Act of 2003. Twenty percent of the total amount of30
expensing added back by this subsection for tax years beginning or deemed31
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to begin on or after January 1, 2003, may be subtracted in the first1
taxable year beginning or deemed to begin on or after January 1, 2006,2
under the Internal Revenue Code of 1986, as amended, and twenty percent3
in each of the next four following tax years. 4
(11)(a) For taxable years beginning or deemed to begin before5
January 1, 2018, under the Internal Revenue Code of 1986, as amended,6
federal adjusted gross income shall be reduced by contributions, up to7
two thousand dollars per married filing jointly return or one thousand8
dollars for any other return, and any investment earnings made as a9
participant in the Nebraska long-term care savings plan under the Long-10
Term Care Savings Plan Act, to the extent not deducted for federal income11
tax purposes. 12
(b) For taxable years beginning or deemed to begin before January 1,13
2018, under the Internal Revenue Code of 1986, as amended, federal14
adjusted gross income shall be increased by the withdrawals made as a15
participant in the Nebraska long-term care savings plan under the act by16
a person who is not a qualified individual or for any reason other than17
transfer of funds to a spouse, long-term care expenses, long-term care18
insurance premiums, or death of the participant, including withdrawals19
made by reason of cancellation of the participation agreement, to the20
extent previously deducted as a contribution or as investment earnings.21
(12) There shall be added to federal adjusted gross income for22
individuals, estates, and trusts any amount taken as a credit for23
franchise tax paid by a financial institution under sections 77-3801 to24
77-3807 as allowed by subsection (5) of section 77-2715.07.25
(13)(a) For taxable years beginning or deemed to begin on or after26
January 1, 2015, and before January 1, 2024, under the Internal Revenue27
Code of 1986, as amended, federal adjusted gross income shall be reduced28
by the amount received as benefits under the federal Social Security Act29
which are included in the federal adjusted gross income if:30
(i) For taxpayers filing a married filing joint return, federal31
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adjusted gross income is fifty-eight thousand dollars or less; or1
(ii) For taxpayers filing any other return, federal adjusted gross2
income is forty-three thousand dollars or less. 3
(b) For taxable years beginning or deemed to begin on or after4
January 1, 2020, and before January 1, 2024, under the Internal Revenue5
Code of 1986, as amended, the Tax Commissioner shall adjust the dollar6
amounts provided in subdivisions (13)(a)(i) and (ii) of this section by7
the same percentage used to adjust individual income tax brackets under8
subsection (3) of section 77-2715.03. 9
(c) For taxable years beginning or deemed to begin on or after10
January 1, 2021, and before January 1, 2024, under the Internal Revenue11
Code of 1986, as amended, a taxpayer may claim the reduction to federal12
adjusted gross income allowed under this subsection or the reduction to13
federal adjusted gross income allowed under subsection (14) of this14
section, whichever provides the greater reduction.15
(14)(a) For taxable years beginning or deemed to begin on or after16
January 1, 2021, under the Internal Revenue Code of 1986, as amended,17
federal adjusted gross income shall be reduced by a percentage of the18
social security benefits that are received and included in federal19
adjusted gross income. The pertinent percentage shall be:20
(i) Five percent for taxable years beginning or deemed to begin on21
or after January 1, 2021, and before January 1, 2022, under the Internal22
Revenue Code of 1986, as amended; 23
(ii) Forty percent for taxable years beginning or deemed to begin on24
or after January 1, 2022, and before January 1, 2023, under the Internal25
Revenue Code of 1986, as amended; 26
(iii) Sixty percent for taxable years beginning or deemed to begin27
on or after January 1, 2023, and before January 1, 2024, under the28
Internal Revenue Code of 1986, as amended; and 29
(iv) One hundred percent for taxable years beginning or deemed to30
begin on or after January 1, 2024, under the Internal Revenue Code of31
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1986, as amended. 1
(b) For purposes of this subsection, social security benefits means2
benefits received under the federal Social Security Act.3
(c) For taxable years beginning or deemed to begin on or after4
January 1, 2021, and before January 1, 2024, under the Internal Revenue5
Code of 1986, as amended, a taxpayer may claim the reduction to federal6
adjusted gross income allowed under this subsection or the reduction to7
federal adjusted gross income allowed under subsection (13) of this8
section, whichever provides the greater reduction. 9
(15)(a) For taxable years beginning or deemed to begin on or after10
January 1, 2015, and before January 1, 2022, under the Internal Revenue11
Code of 1986, as amended, an individual may make a one-time election12
within two calendar years after the date of his or her retirement from13
the military to exclude income received as a military retirement benefit14
by the individual to the extent included in federal adjusted gross income15
and as provided in this subdivision. The individual may elect to exclude16
forty percent of his or her military retirement benefit income for seven17
consecutive taxable years beginning with the year in which the election18
is made or may elect to exclude fifteen percent of his or her military19
retirement benefit income for all taxable years beginning with the year20
in which he or she turns sixty-seven years of age.21
(b) For taxable years beginning or deemed to begin on or after22
January 1, 2022, under the Internal Revenue Code of 1986, as amended, an23
individual may exclude one hundred percent of the military retirement24
benefit income received by such individual to the extent included in25
federal adjusted gross income. 26
(c) For purposes of this subsection, military retirement benefit27
means retirement benefits that are periodic payments attributable to28
service in the uniformed services of the United States for personal29
services performed by an individual prior to his or her retirement. The30
term includes retirement benefits described in this subdivision that are31
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reported to the individual on either: 1
(i) An Internal Revenue Service Form 1099-R received from the United2
States Department of Defense; or 3
(ii) An Internal Revenue Service Form 1099-R received from the4
United States Office of Personnel Management. 5
(16) For taxable years beginning or deemed to begin on or after6
January 1, 2021, under the Internal Revenue Code of 1986, as amended,7
federal adjusted gross income shall be reduced by the amount received as8
a Segal AmeriCorps Education Award, to the extent such amount is included9
in federal adjusted gross income. 10
(17) For taxable years beginning or deemed to begin on or after11
January 1, 2022, under the Internal Revenue Code of 1986, as amended,12
federal adjusted gross income shall be reduced by the amount received by13
or on behalf of a firefighter for cancer benefits under the Firefighter14
Cancer Benefits Act to the extent included in federal adjusted gross15
income. 16
(18) There shall be subtracted from the federal adjusted gross17
income of individuals any amount received by the individual as student18
loan repayment assistance under the Teach in Nebraska Today Act, to the19
extent such amount is included in federal adjusted gross income.20
(19) For taxable years beginning or deemed to begin on or after21
January 1, 2023, under the Internal Revenue Code of 1986, as amended, a22
retired individual who was employed full time as a firefighter or23
certified law enforcement officer for at least twenty years and who is at24
least sixty years of age as of the end of the taxable year may reduce his25
or her federal adjusted gross income by the amount of health insurance26
premiums paid by such individual during the taxable year, to the extent27
such premiums were not already deducted in determining the individual's28
federal adjusted gross income. 29
(20) For taxable years beginning or deemed to begin on or after30
January 1, 2024, under the Internal Revenue Code of 1986, as amended, an31
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individual may reduce his or her federal adjusted gross income by the1
amounts received as annuities under the Civil Service Retirement System2
which were earned for being employed by the federal government, to the3
extent such amounts are included in federal adjusted gross income.4
(21) For taxable years beginning or deemed to begin on or after5
January 1, 2025, under the Internal Revenue Code of 1986, as amended, an6
individual who is a member of the Nebraska National Guard may exclude one7
hundred percent of the income received from any of the following sources8
to the extent such income is included in the individual's federal9
adjusted gross income: 10
(a) Serving in a 32 U.S.C. duty status such as members attending11
drills, annual training, and military schools and members who are serving12
in a 32 U.S.C. active guard reserve or active duty for operational13
support duty status; 14
(b) Employment as a 32 U.S.C. federal dual-status technician with15
the Nebraska National Guard; or 16
(c) Serving in a state active duty status. 17
(22)(a) For taxable years beginning or deemed to begin on or after18
January 1, 2024, under the Internal Revenue Code of 1986, as amended, an19
individual may reduce his or her federal adjusted gross income by the20
amount of interest and principal balance of medical debt discharged under21
the Medical Debt Relief Act, to the extent included in such individual's22
federal adjusted gross income. 23
(b) For taxable years beginning or deemed to begin on or after24
January 1, 2024, under the Internal Revenue Code of 1986, as amended,25
federal adjusted gross income or, for corporations and fiduciaries,26
federal taxable income shall be reduced by the amount of contributions27
made to the Medical Debt Relief Fund, to the extent not deducted for28
federal income tax purposes. 29
(23) For taxable years beginning or deemed to begin on or after30
January 1, 2025, under the Internal Revenue Code of 1986, as amended, an31
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individual who is a qualifying employee as defined in section 77-3108 may1
reduce his or her federal adjusted gross income by the amount allowed2
under section 77-3111. 3
(24) For taxable years beginning or deemed to begin on or after4
January 1, 2026, under the Internal Revenue Code of 1986, as amended,5
federal adjusted gross income or, for corporations and fiduciaries,6
federal taxable income shall be reduced by the amounts allowed to be7
deducted pursuant to section 77-27,242. 8
(25) There shall be added to federal adjusted gross income or, for9
corporations and fiduciaries, federal taxable income for all taxable10
years beginning on or after January 1, 2025, the amount of any net11
capital loss that is derived from the sale or exchange of gold or silver12
bullion to the extent such loss is included in federal adjusted gross13
income except that such loss shall not be added if the loss is derived14
from the sale of bullion as a taxable distribution from any retirement15
plan account that holds gold or silver bullion. For the purposes of this16
subsection, bullion has the same meaning as in section 77-2704.66.17
(26) There shall be subtracted from federal adjusted gross income18
or, for corporations and fiduciaries, federal taxable income for all19
taxable years beginning on or after January 1, 2025, the amount of any20
net capital gain that is derived from the sale or exchange of gold or21
silver bullion to the extent such gain is included in federal adjusted22
gross income except that such gain shall not be subtracted if the gain is23
derived from the sale of bullion as a taxable distribution from any24
retirement plan account that holds gold or silver bullion. For the25
purposes of this subsection, bullion has the same meaning as in section26
77-2704.66. 27
(27)(a) For taxable years beginning or deemed to begin on or after28
January 1, 2027, under the Internal Revenue Code of 1986, as amended,29
federal adjusted gross income shall be reduced by the amount contributed30
to a first-time home buyer savings account under the First-Time Home31
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Buyer Savings Account Act not to exceed five thousand dollars for1
individual taxpayers or ten thousand dollars for married filing jointly2
taxpayers and, to the extent included, by an amount equal to any interest3
and other income earned during the taxable year on the investment of4
money in a first-time home buyer savings account. Any subtraction taken5
under this subdivision is subject to recapture under subdivision (27)(b)6
of this section. 7
(b) For taxable years beginning or deemed to begin on or after8
January 1, 2027, under the Internal Revenue Code of 1986, as amended,9
federal adjusted gross income shall be increased by any amount recaptured10
for the taxable year pursuant to section 5 of this act.11
Sec. 10. Original section 77-2716, Revised Statutes Supplement,12
2025, is repealed. 13
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