Nebraska Inheritance Tax: Rates, Exemptions and What Counties Collect

By Justin Anderson, AAMS · Vice President and Portfolio Manager, Cambridge Advisors Inc. · November 2026

Nebraska has an inheritance tax, and the amount owed depends largely on who receives the property.

For deaths on or after January 1, 2023, qualifying close relatives generally pay 1% above $100,000. Aunts, uncles, nieces and nephews generally pay 11% above $40,000. Other beneficiaries, including friends, generally pay 15% above $25,000. Surviving spouses and beneficiaries under age 22 are exempt.

On a $300,000 inheritance fully subject to the tax, a child age 22 or older in the 1% class would owe $2,000; a friend age 22 or older in the 15% class would owe $41,250. This simplified example assumes no other deductions, exclusions or transfers to either beneficiary.

Nebraska counties collected approximately $101.5 million during the year ending June 30, 2026, up 9.8% from the prior reporting year, according to the Nebraska Department of Revenue.

Nebraska inheritance tax rates and exemptions

The tax is based on the taxable value each beneficiary receives, rather than the estate as a whole.

Beneficiary	Exempt amount	Rate above exemption
Surviving spouse	Fully exempt	0%
Beneficiaries under age 22	Fully exempt	0%
Parents, grandparents, siblings, children, adopted children, lineal descendants and certain related spouses	$100,000	1%
Aunts, uncles, nieces, nephews, certain descendants and qualifying spouses	$40,000	11%
Other beneficiaries, including unrelated individuals	$25,000	15%
Qualifying charities and governmental entities	Fully exempt	0%

Rates apply to deaths on or after January 1, 2023. The relationship categories are summarized; additional definitions and exceptions apply.

How the family relationship is determined

Nebraska’s classifications extend beyond immediate blood relatives.

The 1% category can include a person to whom the deceased stood in an acknowledged parental relationship for at least ten years before death, as well as qualifying descendants of that person. Certain spouses and surviving spouses of listed family members may also receive preferential treatment.

Some relationships through a spouse or deceased former spouse qualify under separate statutory provisions. These distinctions can matter in blended families and when someone raised a child who was not a biological or adopted child.

Caregiving alone does not establish an acknowledged parental relationship. An estate-planning attorney should evaluate the facts and confirm the correct classification.

The current rates were established under LB 310 in 2022 and took effect for deaths beginning January 1, 2023. LB 838 amended the close-relative statute in 2026 without changing its 1% rate or $100,000 exemption. The amendment to § 77-2004 became operative July 18, 2026.

What property is subject to Nebraska inheritance tax?

The tax can apply to property passing through a will, but it isn’t limited to probate assets. Depending on the circumstances, taxable transfers may include:

Property inherited under a will or Nebraska’s intestacy laws.
Certain assets transferred through a trust or other arrangement that takes effect at death.
Jointly owned property, subject to exclusions for consideration provided by the surviving owner and other statutory rules.
Certain gifts made within three years before death for which a federal gift tax return was required, excluding bona fide transfers for adequate and full consideration.
Life insurance proceeds payable to the deceased person’s estate.

Nebraska generally taxes qualifying transfers from deceased Nebraska residents and certain Nebraska property belonging to deceased nonresidents. The scope of the tax depends on the property and applicable exclusions.

Property that may be exempt

Transfers to a surviving spouse, qualifying charitable organizations and governmental entities receive special treatment. Nebraska also excludes certain statutory family allowances and qualifying employee-benefit-plan payments.

Retirement accounts and life insurance

Are inherited IRAs and 401(k)s subject to Nebraska inheritance tax?

A beneficiary designation doesn’t automatically settle the inheritance-tax question.

Nebraska Revised Statute § 77-2007 excludes certain employee-benefit-plan payments, including qualifying benefits not subject to federal estate taxation under Internal Revenue Code § 2039. Whether the exclusion applies to a specific IRA, 401(k), pension or other retirement benefit depends on the account and applicable law.

The exclusion is not a blanket exemption for every retirement account. An estate-planning attorney should review the account and beneficiary arrangement.

Income tax is a separate question

A beneficiary who inherits a traditional IRA may owe federal income tax and applicable state income tax on taxable distributions. Whether Nebraska inheritance tax also applies requires a separate determination. The two taxes should be evaluated separately.

For a Nebraska-resident beneficiary, the taxable portion of a traditional IRA distribution is generally included in Nebraska income, subject to applicable adjustments. This is distinct from the inheritance-tax calculation at the owner’s death.

Avoiding probate does not by itself eliminate inheritance-tax exposure. Families should have an estate-planning attorney and tax professional review retirement-account arrangements.

Is life insurance subject to Nebraska inheritance tax?

Nebraska distinguishes between life insurance proceeds paid to the deceased person’s estate and proceeds paid through other beneficiary arrangements.

Proceeds payable to the estate generally are subject to inheritance tax. Proceeds paid directly to a named individual ordinarily are excluded.

Nebraska also excludes proceeds receivable by a trustee of an inter vivos or testamentary trust, unless the deceased person’s estate is the beneficiary of the trust.

Policy ownership, trust terms and beneficiary arrangements should be reviewed with an estate-planning attorney. A designation should reflect both the intended recipient and how any tax or liquidity needs will be met.

The same $300,000 inheritance, different taxes

Suppose a Nebraska resident dies and leaves $300,000 to one beneficiary. The following hypothetical illustration compares different recipients.

Assume the child, niece and friend are each age 22 or older and fall in the tax classes shown. The grandchild is age 19. Assume the full transfer is within Nebraska inheritance-tax jurisdiction, no other property passes to the same beneficiary, and no additional deductions or exclusions apply beyond those shown.

Beneficiary	Exempt amount	Taxable amount	Rate	Tax
Child age 22 or older	$100,000	$200,000	1%	$2,000
Niece age 22 or older	$40,000	$260,000	11%	$28,600
Friend age 22 or older	$25,000	$275,000	15%	$41,250
Grandchild, age 19	Fully exempt	$0	0%	$0
Qualifying charity	Fully exempt	$0	0%	$0

The amount inherited is identical, but the Nebraska inheritance tax ranges from zero to $41,250 because of the recipient’s classification. This is an illustration, not an actual client situation or an estate’s final tax calculation.

When is Nebraska inheritance tax due?

The tax generally becomes due 12 months after death. A county court determines the tax, either as part of probate or through a separate inheritance-tax proceeding when probate isn’t otherwise required. Payment is made to the appropriate county treasurer.

Interest, penalties and liens

Interest generally begins accruing on unpaid tax after the 12-month deadline. A separate penalty can apply if an appropriate proceeding to determine the tax is not started within 12 months: 5% per month, or fraction of a month, up to 25% of the unpaid tax. The county court may abate that penalty for good cause.

The tax can create a lien against real property subject to it. Lien expiration depends on statutory timing rules, including whether the court determined the tax within ten years of death and whether the tax was paid or the lien released. Expiration of a lien does not necessarily extinguish the personal liability of responsible persons.

Heirs, personal representatives, trustees and other recipients of taxable property may be responsible for payment under Nebraska law.

How much do Nebraska counties collect?

Nebraska’s inheritance tax is collected by counties rather than deposited in the state’s general revenue fund. The Department of Revenue’s 2026 report covers amounts paid from July 1, 2025, through June 30, 2026.

Category	July 2024-June 2025	July 2025-June 2026
Statewide total	$92.5 million	$101.5 million
From Nebraska-resident beneficiaries	$61.7 million	$74.2 million
From nonresident beneficiaries	$30.7 million	$27.3 million
Douglas County	$17.6 million	$22.5 million
Lancaster County	$9.8 million	$10.7 million
Sarpy County	$7.2 million	$7.3 million

Amounts are rounded and may not sum because of rounding. Resident and nonresident figures refer to the beneficiary’s residence, not the deceased person’s residence.

Statewide collections rose approximately 9.8%. Douglas County collected about $22.5 million, or roughly 22% of the statewide total. Douglas, Lancaster and Sarpy counties together accounted for about 40%.

Largest county collections, July 2025-June 2026

Douglas County: $22.5 million
Lancaster County: $10.7 million
Sarpy County: $7.3 million
Antelope County: $3.2 million
Adams County: $2.4 million

Individual counties can experience substantial year-to-year changes, particularly when a small number of large inheritances account for much of the amount paid. The report includes negative net collections for Nance County; the report explains that a negative amount reflects refunds exceeding collections.

These figures show amounts paid during each reporting period. They do not measure the tax liability generated by deaths occurring only during those dates.

The full 2026 county inheritance-tax report includes all Nebraska counties.

How inheritance tax affects estate planning

For families whose beneficiaries may owe Nebraska inheritance tax, both the value received and the beneficiary’s relationship to the deceased affect the calculation. Several decisions deserve attention.

Beneficiary designations

Retirement accounts, insurance policies and other assets that transfer outside probate don’t all receive the same inheritance-tax treatment. The type of asset and applicable exclusions matter.

Who receives which assets

Equal dollar amounts do not necessarily produce equal after-tax inheritances. A $300,000 inheritance to a child age 22 or older in the 1% class can produce less Nebraska inheritance tax than the same amount to a niece or friend age 22 or older in a higher tax class.

Retirement-account income taxes

Inherited traditional retirement accounts can create federal and applicable state income-tax obligations when taxable distributions are taken. Evaluate those obligations separately from inheritance tax. The account type, beneficiary and applicable payout rules affect what each person ultimately receives.

Lifetime gifts

Nebraska includes certain gifts made within three years before death when a federal gift tax return was required. Making a gift shortly before death doesn’t necessarily remove the property from the inheritance-tax calculation. Other transfers can also remain taxable under separate statutory rules.

Liquidity

When an inheritance consists primarily of real estate, farmland or a closely held business, beneficiaries may need a plan to meet the payment deadline without an unwanted sale.

The goal isn’t necessarily to minimize inheritance tax at the expense of everything else. The estate plan should reflect the person’s wishes, family circumstances and broader financial objectives.

At Cambridge Advisors, we consider beneficiary arrangements, retirement-account distributions, investment decisions and liquidity as part of financial planning. We encourage clients to work with estate-planning attorneys and tax professionals when creating or updating wills, trusts, beneficiary designations and other legal documents.

Frequently asked questions

Does Nebraska have an inheritance tax?

Yes. The tax depends primarily on the relationship between the deceased person and each beneficiary. It is separate from federal estate tax and is collected by Nebraska counties.

How much is Nebraska inheritance tax?

For deaths on or after January 1, 2023, qualifying close relatives generally pay 1% above $100,000. Certain other relatives pay 11% above $40,000, and other beneficiaries generally pay 15% above $25,000. Exemptions and statutory relationship definitions apply.

Who is exempt?

Surviving spouses, beneficiaries under age 22, and qualifying charities and governmental entities are generally exempt. Other beneficiaries receive exemptions based on their relationship to the deceased.

Is inherited life insurance taxable in Nebraska?

It depends on who receives the proceeds. Proceeds payable to the estate generally are taxable. Proceeds payable directly to individuals or qualifying trustees generally receive exclusions. Policy and trust arrangements require attorney review.

When must the tax be paid?

The tax generally becomes due 12 months after death. Interest applies to unpaid tax after that date, and a separate penalty can apply when the appropriate tax-determination proceeding is not started on time.

Related Nebraska retirement resources

Talk through your estate and retirement plan

Inheritance tax is one consideration when deciding how assets should pass to family and other beneficiaries. Cambridge Advisors helps clients consider how investments, retirement accounts and financial plans fit their broader estate-planning goals.

Schedule a complimentary discovery meeting or call 402.697.1166. There is no obligation to become a client.

Important disclosures and primary sources

Cambridge Advisors Inc. is a fee-only investment adviser registered with the U.S. Securities and Exchange Commission and based in Omaha, Nebraska. SEC registration does not imply any particular level of skill or training.

This article provides general education and information. It is not personalized investment, tax, accounting or legal advice and does not recommend a specific investment, tax or estate-planning strategy. Cambridge Advisors provides financial planning and investment advisory services but does not provide tax or legal advice. This is not a complete discussion of the rules summarized.

Tax laws and interpretations may change. Nebraska inheritance-tax treatment depends on the deceased person’s circumstances, the beneficiary, the property and applicable law. The county court determines the tax. Hypothetical illustrations do not represent actual clients or guarantee a tax result.

Investment and retirement-income decisions involve market risk, including possible loss of principal, and tax and liquidity consequences. Advisory fees, investment expenses and other account costs reduce investment returns over time. Consult qualified legal and tax professionals about your circumstances.

Information about Cambridge Advisors’ services, fees and conflicts is in its Form ADV and Form CRS through the SEC Investment Adviser Public Disclosure website (CRD 104851). See Form ADV Part 2A, Item 5, for advisory fee information. Reading this article does not create an advisory relationship. Government references do not imply endorsement.

Information checked October 29, 2026.