Nebraska fully exempts military retirement pay from state income tax — a clean, complete exemption with no caps or phase-in that took full effect for all military retirees starting January 1, 2022. The state adds a homestead property tax exemption program for totally disabled veterans, a new motor vehicle tax exemption effective January 1, 2026 for disabled and blind veterans, and the Nebraska Veterans Aid Fund providing emergency financial assistance. Nebraska is home to approximately 130,000 veterans, with Offutt Air Force Base near Omaha serving as the home of U.S. Strategic Command and Air Force Weather Agency.
USMilitary.org is an independent educational resource, not affiliated with the Nebraska Department of Veterans’ Affairs, the VA, or any government agency. For official benefit information, visit veterans.nebraska.gov.
- Military retirement pay is 100% exempt from Nebraska income tax for all military retirees — fully phased in since January 1, 2022
- Beginning January 1, 2026, disabled and blind veterans receive an exemption from Motor Vehicle Tax and Motor Vehicle Fee on one personal vehicle
- The Nebraska Homestead Exemption provides full or partial property tax relief for totally disabled veterans and their surviving spouses — with income and home value limits
- Reserve unit members may be eligible for a 50% tuition credit at Nebraska state and community colleges
- Children and spouses of veterans who died from service-connected causes receive a tuition waiver for base fees at state institutions
- The Nebraska Veterans Aid Fund provides emergency financial assistance to Nebraska veterans and their families facing hardship
- Income Tax Benefits
- Property Tax: Nebraska Homestead Exemption
- Motor Vehicle Tax Exemption (New 2026)
- Education Benefits
- Employment Benefits
- Nebraska Veterans Aid Fund
- Nebraska Veterans Home Loan Program
- State Veterans Homes
- Surviving Spouse Benefits
- How to Access Nebraska Veteran Benefits
- Frequently Asked Questions
Income Tax Benefits
Military Retirement Pay — 100% Exempt
For tax years beginning on or after January 1, 2022, all military retirees may exclude 100% of military retirement benefits from Nebraska taxable income, to the extent the income is included in federal adjusted gross income. This full exemption covers all branches, all ranks, and all amounts with no phase-in remaining. This makes Nebraska one of the states that does not tax military retirement pay.
Survivor Benefit Plans — Exempt
SBP, RCSBP, and RSFPP annuities are not taxed in Nebraska under the same treatment as military retirement pay.
Military Disability Retirement Pay — Exempt
Military disability retirement pay received as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service is excluded from Nebraska taxable income.
VA Disability Compensation and DIC — Exempt
VA disability compensation and DIC are federally tax-free and carry no Nebraska state tax liability.
Combat Zone Income — Exempt
Nebraska follows federal guidelines for tax filing extensions and does not tax income received by a service member while serving in a designated combat zone, contingency operation, or qualified hazardous duty area.
Property Tax: Nebraska Homestead Exemption
The Nebraska Homestead Exemption Program provides full or partial property tax exemption for qualifying veterans and their surviving spouses on their homestead and up to one acre of land. This is Nebraska’s primary property tax benefit for veterans.
Qualifying veteran categories include:
- Veterans totally disabled by a service-connected accident or illness (Category 4V — no income limit)
- Qualified totally disabled veterans or their surviving spouses (income and home value limits apply)
- Veterans whose home was substantially contributed to by the VA Specially Adapted Housing grant, and their surviving spouses
- Wartime veterans with other-than-dishonorable discharge meeting specific criteria (Categories 1–3 and 6, income limits apply)
- Unremarried surviving spouses of members killed in action (Category 7)
Category 4V — Totally Disabled Veterans (No Income Limit): Veterans totally disabled by a service-connected accident or illness qualify for the homestead exemption without an income limit. This is the most accessible category for veterans with total service-connected disability. The veteran must own and occupy the homestead from January 1 through August 15 of the taxable year.
Application: File Nebraska Form 458 with your county assessor annually. The 2026 filing period runs from February 2 through June 30. Category 4V veterans generally do not need to refile each year once initially approved — confirm with your county assessor.
For full details on income and home value limits by category, contact the Nebraska Department of Revenue or download the Nebraska Homestead Exemption Information Guide at revenue.nebraska.gov.
Motor Vehicle Tax Exemption — New January 1, 2026
Beginning January 1, 2026, all disabled and/or blind veterans in Nebraska are eligible for an exemption from the Motor Vehicle Tax and Motor Vehicle Fee on one personal vehicle owned and used for personal transportation. Important details:
- Applies to Motor Vehicle Tax and Motor Vehicle Fee only — plate fees, sales tax, and wheel tax still apply
- Covers one vehicle per eligible veteran
- Available to disabled veterans and blind veterans
- Contact the Nebraska Department of Motor Vehicles for application requirements and documentation
Education Benefits
Reserve Unit Tuition Credit — 50%
Enlisted members of Nebraska-based reserve units may be eligible for a 50% tuition credit at Nebraska state colleges and community colleges. This applies to members in good standing and actively participating in a Nebraska-based reserve component unit.
Tuition Waiver for Dependents of Service-Connected Deaths
Children and spouses of veterans who died of a service-connected illness or injury receive a tuition waiver for base fees at Nebraska state institutions. The waiver covers base tuition fees and does not include laboratory fees, athletic tickets, student union fees, or other special fees. Contact individual institution financial aid offices for current application requirements and covered fee schedules.
Nebraska National Guard Tuition Assistance
Nebraska National Guard members may be eligible for state tuition assistance through programs administered by the Nebraska National Guard. Contact the Nebraska National Guard Education Services Office for current programs, benefit amounts, and eligibility requirements.
Employment Benefits
Veterans Preference in State Employment
Nebraska provides veterans’ preference in state government hiring for honorably discharged veterans. The Nebraska Department of Administrative Services administers the preference program. Priority of Service is also provided for veterans through Nebraska’s workforce development system, ensuring veterans receive preferential access to employment programs and job training.
Nebraska Veterans Aid Fund
The Nebraska Veterans Aid Fund provides emergency financial assistance to Nebraska veterans and their families facing unexpected hardship. The fund can assist with essential needs including housing, utilities, and emergency expenses. Applications are processed through the Nebraska Department of Veterans’ Affairs and its county offices. County Veterans Service Officers can connect veterans with both the state Aid Fund and local nonprofit resources.
Nebraska Veterans Home Loan Program
The Nebraska Department of Veterans’ Affairs offers a veterans home loan program providing favorable mortgage terms to eligible Nebraska veterans. The program offers competitive interest rates and may assist with down payment requirements. Contact the Nebraska Department of Veterans’ Affairs at veterans.nebraska.gov for current rates, income limits, and eligibility requirements.
State Veterans Homes
Nebraska operates three state veterans homes providing long-term care for eligible veterans:
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- Nebraska Veterans’ Home, Grand Island — the largest facility
- Nebraska Veterans’ Home, Norfolk
- Nebraska Veterans’ Home, Scottsbluff
The Nebraska Veterans’ Cemetery at Alliance provides burial services for eligible Nebraska veterans and their dependents. Contact the Nebraska Department of Veterans’ Affairs for eligibility and admission criteria for all facilities.
Surviving Spouse Benefits
Unremarried surviving spouses of qualifying veterans share in the Nebraska Homestead Exemption program under several categories, including Category 4V (totally disabled) and Category 7 (killed in action). SBP and DIC payments are exempt from Nebraska income tax. Surviving spouses of veterans with VA-contributed homes retain homestead exemption eligibility under specific conditions.
How to Access Nebraska Veteran Benefits
- Nebraska Department of Veterans’ Affairs: veterans.nebraska.gov | Phone: 402-420-4021
- Homestead Exemption: File Form 458 with your county assessor by June 30
- Motor vehicle tax exemption (2026): Contact Nebraska DMV for application details
- Reserve tuition credit: Contact your unit’s education officer or individual Nebraska colleges
- Veterans Aid Fund: Contact your county Veterans Service Officer
- Home loan program: veterans.nebraska.gov
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Nebraska Department of Veterans’ Affairs, the VA, or any government agency. Benefits are subject to change — verify current program details at veterans.nebraska.gov.
Frequently Asked Questions
No. As of January 1, 2022, all military retirement pay is 100% exempt from Nebraska income tax for all military retirees. There are no caps, no age requirements, and no partial phase-in remaining.
Totally disabled veterans with service-connected disabilities qualify for the Homestead Exemption under Category 4V — with no income limit. Other disability categories have income and home value limits. File Form 458 with your county assessor between February 2 and June 30 annually. Category 4V veterans generally don’t need to refile each year once initially approved.
Starting January 1, 2026, disabled and blind veterans in Nebraska are exempt from the Motor Vehicle Tax and Motor Vehicle Fee on one personally owned vehicle used for personal transportation. Plate fees, sales tax, and wheel tax still apply. Contact the Nebraska DMV for documentation requirements.
Children and spouses of veterans who died from service-connected causes receive a tuition waiver covering base fees at Nebraska state institutions. Reserve unit members may qualify for a 50% tuition credit at state and community colleges. Contact the Nebraska Department of Veterans’ Affairs and individual institution financial aid offices for current details.