Nebraska Nonresident Employee Tax Percentage

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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, 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 rates as Nebraska residents.  For nonresident individuals performing personal services, enter the percent of income tax to be withheld, either 4% or 6% of the regular tax rate, based on Nebraska Circular E.

For further information, see this guide for withholding income tax for Nonresident Individuals Performing Services in Nebraska.

For new customers adding employees in the wizard, this field is found on the employee’s Tax Information page.  For employees added after the wizard, this is found under:

  • Payroll > Employees > Employee List > Click the employee name > Taxes > Edit
  • Under the State and Local Withholding section, for the Nonresident Percentage, 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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