Nebraska Military Retirement Taxes 2026
NEW: 100% exemption on military retirement pay + low cost of living
🎯 Quick Summary (2026)
- ✓ Military retirement pay: 100% EXEMPT (since 2022)
- ✓ VA disability: Tax-free
- ✓ Property tax: Exemptions for disabled veterans
- ✓ Cost of living: 8% below national average
- ✓ Offutt AFB: Home of STRATCOM
Twenty years in, the hard question was never the tax rate
It's what you have to earn on the outside so your family never feels the drop. Nebraska taking $0 of your pension is one line of that math. Your federal bracket and your VA rating decide the rest. Put your numbers in and you get one figure back: the civilian salary you need in Nebraska. Once you know it, you can go after work you actually want instead of the first offer that covers the bills. About a minute, free, no account, nothing saved.
See the salary I need →2026 Nebraska Tax Breakdown
🎉 100% EXEMPT from State Income Tax!
Since tax year 2022 (LB 387), Nebraska fully exempts ALL military retirement pay from state income tax, replacing the old partial exemption. Your entire military pension is tax-free at the state level.
Property Tax Relief
Nebraska's benefit for totally disabled veterans is stronger than a credit, and it is one of the few in the country with no means test at all:
- • 100% service-connected disabled veterans (Category 4V): the homestead is 100% exempt from property tax, regardless of the home's value and regardless of your income
- • Individual unemployability rated at 100% qualifies for Category 4V the same as a 100% schedular rating
- • No income statement required for Category 4V, unlike Nebraska's other homestead exemption categories
- • Ratings below 100% do not qualify for Category 4V. There is no partial veteran tier
- • Homeowners 65 and older can claim a separate, income-tested homestead exemption
Deadline: file Form 458 with your county assessor every year between February 1 and June 30. First-time applicants also file Form 458B, the certification of disability. Missing the June 30 date costs you the year.
Those numbers aren't your family's
Your rank, your years, your rating, your house payment. Same math run on your numbers: what actually lands in the account each month after federal tax, and the civilian salary that closes whatever gap is left. If your spouse is working, it counts that too. You walk away with a target instead of a worry.
Run my numbers →Cost of Living in Nebraska
Nebraska's cost of living is 8% below the national average:
📍 Housing
Median home: $230,000
Rent (2BR): $1,100/month
Property tax: Moderate (~1.5%)
🛒 Living Costs
Groceries: Below average
Healthcare: Below average
Utilities: Below average
Military Installations
✈️ Offutt Air Force Base (Bellevue)
• Home of US Strategic Command (STRATCOM)
• 55th Wing (reconnaissance)
• 10,000+ military/civilian personnel
• Full commissary and exchange facilities
🎖️ Nebraska National Guard
• Camp Ashland Joint Forces Training Center
• Multiple armories statewide
• Strong Guard presence
Best Cities for Military Retirees
🏙️ Omaha
Why: Near Offutt AFB, low unemployment, Fortune 500 companies, excellent healthcare, growing tech scene
Housing: $245,000 median
Population: 480,000+
🎓 Lincoln (Capital)
Why: University of Nebraska, state capital, stable economy, affordable, young population
Housing: $260,000 median
Population: 295,000
✈️ Bellevue
Why: Offutt AFB location, military-friendly community, excellent schools, safe
Housing: $220,000 median
Population: 53,000
Pros & Cons
✅ PROS
- ✓ 100% military retirement exemption (NEW!)
- ✓ Low cost of living
- ✓ Affordable housing
- ✓ Offutt AFB access
- ✓ Low unemployment
- ✓ Safe communities
- ✓ Excellent schools
- ✓ Four distinct seasons
❌ CONS
- ✗ Cold winters (-10°F common)
- ✗ Tornado risk in spring
- ✗ Limited VA facilities
- ✗ Rural in many areas
- ✗ Sales tax (5.5-7.5%)
FAQs
Does Nebraska tax military retirement pay?
No. Since tax year 2022, Nebraska fully exempts all military retirement pay from state income tax.
Is Nebraska a good state for military retirees?
Yes, especially since the 2022 exemption. Nebraska offers no tax on military retirement, low cost of living, affordable housing, Offutt AFB access, safe communities, and a strong economy. The main drawbacks are cold winters and rural nature of some areas.
Does Nebraska tax Social Security?
Yes, Nebraska does tax Social Security benefits, though there are exemptions for lower-income retirees. This is one area where Nebraska is less favorable than some neighboring states.
Calculate Your Nebraska Retirement Income
See your tax-free income with our calculator
Use Free Calculator →Comparing states? The $4.99 worksheet ranks your exact pension in all 50, Nebraska included, with 20-year state tax totals for each. Get the worksheet or see a sample first.
Weighing other states too? Compare Iowa, Kansas and South Dakota, or see the full 50-state ranking of military retirement taxes.