Nebraska recently released the 2025 Circular EN (Nebraska Income Tax Withholding on Wages, Pensions and Annuities, and Gambling Winnings Paid on or after January 1, 2025). Notably, the guide details important legislative changes to the Nebraska income sourcing and withholding rules for nonresident payees. For taxable years beginning on or after January 1, 2025:
- Nebraska income tax withholding is not required for wages paid to a nonresident employee for attending a conference or training if three requirements are met. First, the nonresident employee works in more than one state a year. Second, the nonresident employee works physically in Nebraska for seven days or less. Finally, the nonresident earns $5,000 or less for the work physically performed in Nebraska.
- Nebraska income tax withholding is not required for wages paid to a nonresident employee if the nonresident employee is paid both convenience rule wages and wages for working seven or less days in Nebraska in a taxable year. The term ‘convenience rule wages’ means wages paid for work performed outside Nebraska for the nonresident employee’s convenience.
- Nebraska income tax withholding is required for wages paid to a nonresident employee if the nonresident employee is paid both convenience rule wages and wages for working more than seven days in Nebraska for a taxable year. Withholding under this rule only applies to the wages paid for work performed within Nebraska.
- Nebraska income tax withholding is no longer required for payments to nonresident board of directors, or nonresidents with similar positions on the governing body of a business, for services performed in Nebraska that are related to the board or governing body.
Nebraska’s 2025 Circular EN can be found here.
