Claim your LB1107 Tax Credit

 In Newsroom, Policy

With the passage of LB1107, The Nebraska Property Tax Incentive Act, Nebraska property tax payers are eligible for a refundable income tax credit on school district property taxes, excluding property taxes levied to service bonds or a voter-approved override of the limits on property tax levies. The credit is available beginning on or after January 1, 2020. Taxpayers who do not otherwise have a Nebraska income tax filing requirement will need to file a Nebraska income tax return to claim the credit.

Example: In 2020, an individual paid the 2019 property taxes levied on a parcel located in Adams County. The 2019 real estate tax statement includes the following amounts:

Hastings School District $2,200
Hastings School Bond $381

In this case, only the $2,200 levied by the Hastings School Districts can be entered as school district property tax paid. The Hastings School Bond amount levied for the Hastings School District cannot be included in the amount of school district property tax paid.

The credit is calculated by factoring the credit percentage announced by the Nebraska Department of Revenue multiplied by the amount of school district property taxes paid during the tax year. The credit percentage for 2020 is 6.0% and is set based on a total amount of credits of $125 million. For future years, the credit percentage may increase if net General Fund revenues increase by more than 3.5%.

The Department of Revenue encourages taxpayers claiming the credit to use the Nebraska School District Property Tax Look-up Tool. The Look-up Tool will assist taxpayers and preparers in determining the allowable dollar amount of school district property taxes paid to the county treasurer for each parcel during the income tax year. Remember, the total amount of tax due reported on your Real Estate Tax Statement is not the amount used to calculate the credit claimed on your Nebraska tax return, the calculation is performed using actual taxes paid during the tax year.

How to Calculate and Claim your Credits:

  1. Download the Nebraska Property Tax Incentive Act Credit Computation Form (Form PTC)
    1. This form must be filed by all taxpayers claiming the credit and by any partnership, S corporation, or limited liability company (LLC) distributing school district property taxes paid to its owners.
    2. When a parcel is owned by more than one individual or entity, it is assumed the school district property tax was paid by each owner based on their parcel ownership percentage during the property tax year. This assumption may be overcome by providing evidence to the contrary.
    3. Each partnership, S corporation, or LLC must provide its owners or beneficiaries with the information necessary to complete Section C, Form PTC.
  2. To find taxes paid on each parcel owned, utilize the Nebraska School District Property Tax Look-Up tool – click here. The site will provide the allowable dollar amount of net taxes paid after state property tax credits are applied.
  3. After finding taxes paid on each parcel owned, follow the instructions to complete Form PTC.
  4. Enter the amount from line 4 of Form PTC on the applicable income tax form. Be sure to attach Form PTC when filing income taxes.

Questions or More Information:
The information provided here is for informational purposes only. For additional guidance about calculating or claiming the tax credit, contact a tax professional or the Department of Revenue for specific questions. (Tom Milburn – NE Department of Revenue -Revenue Tax Specialist, Policy Section: Phone: 402-471-5814 or tom.milburn@nebraska.gov) Or, visit the Nebraska Department of Revenue for more information here.

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