State moves to make new tax credit easier for taxpayers to claim

By: - February 1, 2022 10:49 am

(Getty Images)

LINCOLN — A state tax official said Tuesday that Nebraskans should find it easier this year to claim a new and growing state tax credit — one that many taxpayers didn’t claim last year.

 About $78.5 million out of the $125 million in credits available through Legislative Bill 1107 had been claimed by property owners through Jan. 21, according to state tax officials.

 The fact that so much remained unclaimed led to some criticism.  The credit, which provides an income tax refund for a portion of property taxes that support K-12 school districts, the main beneficiary of property taxes. The credit was passed as part of a compromise in the Nebraska Legislature.

Enhanced look-up tool

One critic was the Platte Institute, an Omaha-based, free market think tank, which said the credit under LB 1107 did nothing to stop the growth of property taxes and was not a permanent solution. A state association that represents accountants also maintained that the credit was difficult to calculate for some taxpayers.

 On Tuesday, the Nebraska Department of Revenue unveiled a new, “enhanced” lookup tool for taxpayers to calculate their credit, which State Tax Commissioner Tony Fulton billed as a “super-sized” credit this year.

A spokeswoman for the Revenue Department, former State Sen. Lydia Brasch, said officials took suggestions from several sources, including a state senator, to “enhance” the lookup tool on the department’s website that helps taxpayers calculate their credit.

“We believe that it will be easier to use,” Brasch said.

$548 million now available

Last year, the credit amounted to about 6% of Nebraskans’ payments in property taxes to support K-12 schools. This year, because of the state’s strong tax collections and growing cash reserves, about $548 million will be available through the credit. That would amount to a 25.3% refund.

 “This puts dollars back into the pockets of the people who paid soaring property taxes across the entire state,” Fulton said in a press release.

Brasch said many tax returns from last year have yet to be processed, so more people might claim the $125 million available last year. 

To claim the income tax credit, taxpayers should file the Nebraska Property Tax Incentive Act Credit Computation, Form PTC, with their income tax or franchise tax returns.

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Paul Hammel
Paul Hammel

Senior Reporter Paul Hammel has covered the Nebraska state government and the state for decades. Previously with the Omaha World-Herald, Lincoln Journal Star and Omaha Sun, he is a member of the Omaha Press Club's Hall of Fame. He grows hops, brews homemade beer, plays bass guitar and basically loves traveling and writing about the state. A native of Ralston, Nebraska, he is vice president of the John G. Neihardt Foundation.