Does Nebraska tax military retirement pay?
Not taxed
No. Nebraska lets all military retirees exclude 100% of their military retirement benefits, to the extent included in federal AGI.
In the state's own words
Copied word for word from the official document linked below each quote:
“All military retirees are allowed to exclude 100% of the military retirement benefits from the income subject to Nebraska income tax to the extent included in federal AGI.”
Other retirement income in Nebraska
Yes, generally. Nebraska's return starts from federal adjusted gross income, so taxable pensions and IRA withdrawals are included. Military retirement benefits are fully excluded. The Nebraska pension page has the details, and the Nebraska Social Security page covers Social Security. No, starting with 2024 returns. Nebraska removes all the Social Security that is in your federal adjusted gross income.
Before you file or move
This page is about state income tax only. Your federal return has its own rules for military retired pay, and VA disability compensation is a separate benefit from retired pay. State rules change, and the details (age, years, which kinds of pay qualify, survivor benefits) matter. Check with the Nebraska Department of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- 2025 Nebraska Individual Income Tax BookletNebraska Department of Revenue. Read on November 13, 2026.