Nebraska Nonresident Employee Tax Percentage
Background
Nebraska nonresident personal service withholding is not calculated using the same methods used to calculate withholding on wages. Instead, withholding on nonresident personal services is calculated using the Nebraska Form W-4NA and the following rates: If the net payments (payments minus expenses) are less than $28,000, the withholding rate is 4% of the net payments. If the net payments are $28,000 or more, the rate is 6% of the net payments.
In the software, if you have an employee who is not a resident of Nebraska AND doesn’t work in Nebraska 100% of the time, you’ll need to enter a non-resident percent of Nebraska state income tax to be withheld. By default, this field is blank, which will tax the employee at the same rate as Nebraska residents. Enter the either 4% or 6% of the regular tax rate according to what the employee has filled out on the 9N .
How to Enter Employee Non-resident rate for Nebraska
- Go to Payroll > Employees > Employee List > Click the employee name > Taxes > State Withholding
- Click Edit
- In the Nonresident Percentage field, enter the nonresident tax percentage to be withheld (either 4% or 6%). Do not enter 0, as this will result in zero tax withholding.
- Click Save.
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