Gov. Dave Heineman today signed into law several bills that will bring some tax relief to Nebraskans in specific areas. The Governor highlighted tax relief for hard-working middle class families through the elimination of the alternative minimum tax, tax relief for families saving with a Nebraska College Savings Plan by expanding the tax deduction, and tax relief for employees through employee stock ownership changes.
"These important tax bills represent small steps forward regarding tax relief and tax competitiveness, but they are important steps forward," said Gov. Heineman. "They are important to individual and small business taxpayers. Next year, our state will have the opportunity to take a giant step forward regarding tax relief and tax reform."
LB 308 delivers tax relief to hard-working middle class families. This law changes income taxes by eliminating the federal alternative minimum tax calculation for individual state income tax purposes for taxable years beginning Jan. 1, 2014. The federal credit for prior alternative minimum tax year would also be eliminated for taxable years 2014 and beyond.
LB 296 provides tax relief for Nebraska families saving for college. This law allows higher tax deductions for Nebraskans making contributions to a Nebraska College Savings Program account. Currently, contributions to a Nebraska College Savings Program account are exempt from state income tax up to $2,500 for a married person filing separately and $5,000 for a married couple filing jointly. This bill would allow an increase in exempt contribution to $5,000 for a married person filing separately and $10,000 for a married couple filing jointly.
LB 573 brings tax relief for business employees. This law designates an employee stock ownership plans as a qualified corporation, allowing its individual shareholders to exclude dividends and capital gains from their taxable incomes. This will especially help employee-owned businesses.