Nebraska Inheritance Tax: A Plain-English Guide

Last updated October 27, 2026 · By Kole Pederson, Midwest Ag Law

The short answer

Yes, Nebraska has an inheritance tax. Close family pays 1% on what each person gets over $100,000. Nieces, nephews, aunts, and uncles pay 11% over $40,000. Everyone else pays 15% over $25,000. A spouse pays nothing, and so does anyone under 22. The tax is due to the county 12 months after death.

Who pays and how much

The tax depends on how each person is related to the one who died. Each person gets their own exemption.

One more group pays the 1% rate: a person the deceased treated as their own child for at least 10 years before death. Courts look at the whole relationship, not just paperwork.

These rates apply to deaths on or after January 1, 2023.

A farm example

Say a Nebraska farmer leaves land worth $1 million, split three ways. This example skips debts and costs, which can lower the tax.

• Three children get $333,333 each. Each pays 1% on $233,333, or about $2,333. Total tax: about $7,000.
• Two children and a nephew get $333,333 each. The children pay about $2,333 each. The nephew pays 11% on $293,333, or about $32,267. Total tax: about $36,933.

Same farm, same split. The nephew’s share alone costs more than four times what all three children paid in the first example. This is why who gets the land matters as much as how much.

What property is taxed

• All property of a Nebraska resident, except real estate and tangible property located in another state.
• Nebraska land and tangible property owned by someone who lived in another state.
• Property in a trust. A trust avoids probate, but it does not avoid the inheritance tax.
• Joint tenancy property. It’s taxed too, except the part the surviving owner can show they paid for (Neb. Rev. Stat. 77-2002).
• Land deeded away with a life estate kept. If the owner kept the use of the land until death, it can still be taxed.
• Big gifts in the last three years of life. Gifts that required a federal gift tax return are taxed as if inherited. Gifts made more than three years before death are not (Neb. Rev. Stat. 77-2002).

Usually not taxed: life insurance in most cases. Life insurance paid to a trust is not taxed, unless the estate is the trust’s beneficiary (Neb. Rev. Stat. 77-2002).

When it’s due and who collects it

The tax is set in a case filed in the county court, usually in the county where the person lived. It’s paid to that county, not the state. The money stays with the county.

The tax is due 12 months after the date of death. After that, interest runs. If the court case isn’t filed within 12 months, a penalty can be added too (Neb. Rev. Stat. 77-2010). This deadline applies even if no probate is needed.

Each county collects its own inheritance tax. See what was paid in Hamilton, York, Buffalo, Custer, Hall, and Dawson counties.

How farm families plan for it

These are common tools. The right mix depends on your family, your land, and your goals.

• Plan who gets what. Leaving land to children and grandchildren costs far less than leaving it to nieces, nephews, or a non-family farmer.
• Give earlier. Gifts made more than three years before death are outside the tax. Gifts can raise other issues, like Medicaid and capital gains, so plan them with care.
• Use life insurance. Insurance can pay the tax or even out shares among heirs.
• Get values right. The tax is based on fair market value at death. A good appraisal matters for farmland.
• Plan the timeline. The 12-month deadline comes fast. A clear plan helps the family file on time.

Recent changes

• 2023 (LB310). For deaths starting January 1, 2023, Nebraska raised the tax-free amounts and cut the rates for remote relatives and non-relatives.
• 2026 (LB838). This law reworded the list of close relatives who pay 1%. It took effect July 18, 2026. It did not change the rates or tax-free amounts.
• Lawmakers have proposed ending the tax more than once. As of this update, it is still in effect.

Frequently asked questions

Does Nebraska have an inheritance tax?

Yes. Nebraska is one of only a few states that still has one. It’s collected by each county.

Who pays the Nebraska inheritance tax?

The tax is owed on what each heir receives. In practice, the personal representative or trustee usually pays it from the estate before shares are handed out.

Is a surviving spouse exempt?

Yes. Everything passing to a surviving spouse is free of Nebraska inheritance tax.

Does it apply to land held in an LLC?

Yes. An ownership share in an LLC is property, and it’s taxed like other property. Its value may be figured differently than land owned outright.

Does it apply if I live out of state but own Nebraska land?

Yes. Nebraska land and tangible property are taxed even if the owner lived elsewhere.

Does a trust avoid the inheritance tax?

No. A trust avoids probate, but property in it is still taxed.

What happens if the tax is paid late?

Interest starts after 12 months. A penalty can also apply if the county court case isn’t filed on time.

Need help with the inheritance tax?

Whether you’re planning ahead or settling an estate now, we can help. All work is flat fee, quoted up front.

• Planning ahead? See Nebraska Farm Estate Planning and Farm Succession Planning.
• Settling an estate? See Nebraska Probate.

Book a Free 30-Minute ConsultCall (816) MW-AGLAW

Last updated: October 27, 2026. This guide is general information, not tax or legal advice for your situation. Sources: Neb. Rev. Stat. 77-2001 to 77-2010.