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Nebraska Estate Tax and Federal Rules
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Nebraska Estate Tax and Federal Rules

Nebraska's own estate tax reached only deaths before January 1, 2007. Federal estate tax starts above $15,000,000 for a 2026 death.

By Settled Editorial

Nebraska charges no estate tax on anyone who died on or after January 1, 2007. The only tax on the whole estate that can still reach a Nebraska family is the federal estate tax, and for a death in 2026 it starts above $15,000,000 of gross estate plus lifetime taxable gifts. Almost no Nebraska estate owes a dollar of it.

Nebraska does keep a death tax, and it catches people who read the sentence above and stop there. It is an inheritance tax, it is charged to each person on what that person receives rather than to the estate as a whole, and it is paid to a county treasurer instead of a state agency. The Nebraska inheritance tax is its own page and owns the rates, the classes and the county mechanics. If you want the short version of which death taxes Nebraska does and does not levy, with the repeal date that ended the state estate tax set against the inheritance tax that survived it, the Nebraska estate tax page answers that in one screen.

This page covers the federal tax and the four Nebraska rules that sit beside it: the death-date cutoff that ended the state estate tax and left its sections standing, the deduction each tax allows for the other, the apportionment rule at Neb. Rev. Stat. 77-2108 that decides who inside the family pays a federal bill, and the lien release that Nebraska offers in place of the waiver executors keep asking for. It does not cover the basis reset on inherited assets, which is the tax rule that matters to far more Nebraska families. That lives in step-up in basis in Nebraska.

Nebraska's Estate Tax Ended On A Death Date, Not On A Repeal Date

Neb. Rev. Stat. 77-2102 and 77-2113 both describe what they govern as the tax imposed under "sections 77-2101 to 77-2116." Pull that run of sections out of the chapter 77 index and 22 rows come back, of which three are marked repealed. Nineteen live sections carrying a set of defined terms, a rate table, a due date, a lien, a return and a penalty. Nothing in that list tells you the tax is gone.

The answer is in the first line of the charging section. Neb. Rev. Stat. 77-2101.01(1) levies the estate or excise tax "for all decedents dying before January 1, 2007." Its companion at 77-2101.02 imposes the Nebraska generation-skipping transfer tax "for all generation-skipping transfers occurring before January 1, 2007." Both cutoffs arrived together in Laws 2007, LB367, at sections 6 and 7, and section 8 of the same act closed the rate table at 77-2101.03.

The legislature ended the tax by narrowing what it applies to rather than by striking the sections. That choice was deliberate and it has a practical reason: the estate of someone who died in 2004 can still be open in a Nebraska county court, and the sections have to stay readable for that estate. Read the death date first and the rest of the run answers itself.

Here is what those sections said while they were live, because a Nebraska family cleaning up an old estate still needs them.

Death dateWhat Nebraska chargedWhere it is written
Before January 1, 2003The maximum federal state death tax credit, reduced by death taxes paid to other states and by Nebraska inheritance tax paid77-2101.01(2)
On or after January 1, 2003 and before January 1, 2007The amount calculated under 77-2101.03, adjusted for property situated outside Nebraska and reduced by Nebraska inheritance tax paid77-2101.01(3)
On or after January 1, 2007Nothing. The estate tax and the generation-skipping transfer tax both stop at this date77-2101.01(1), 77-2101.02

Two details from the same run of sections explain why the old tax reached so few estates and why it is easy to mistake for something still alive.

The starting line was one million dollars, and it was borrowed. Neb. Rev. Stat. 77-2101(3) defines Nebraska taxable estate as "the federal taxable estate, as determined under Chapter 11 of the Internal Revenue Code, minus one million dollars," and subsection (4) does the same arithmetic for a generation-skipping transfer under Chapter 13. Nebraska never wrote its own valuation code. It took the federal number and subtracted a million.

The payee was the State Treasurer, not a county. Neb. Rev. Stat. 77-2102 made the transfer tax due to the State Treasurer within twelve months of the death, charged interest at the section 45-104.02 rate on anything unpaid, and made the tax a lien on the real property until the first of payment, ten years from the death, or a discharge under section 77-2039, with no lien on any interest passing to the surviving spouse. Section 77-2113 required the personal representative to file a Nebraska estate tax return with the Tax Commissioner within twelve months, along with pages 1, 2 and 3 of any federal estate tax return, a copy of the federal determination of estate tax, and a copy of the inheritance tax return or worksheet filed with the county court in each county where the decedent held property.

That last list is the reason people remember a Nebraska estate tax filing. It was real, it was a state filing, and it ended for deaths after 2006.

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The Tax Nebraska Still Charges Goes To A County

The live death tax sits a hundred section numbers earlier, in the run from 77-2001 to 77-2040. Neb. Rev. Stat. 77-2003 makes the inheritance tax payable "to the treasurer of the proper county" and holds every heir, legatee, devisee, personal representative, trustee and other recipient of taxable property liable until it is paid. The determination happens in the county court rather than at a revenue agency.

The rate and the exemption turn on the beneficiary's relationship to the decedent, and both figures below apply to deaths on or after January 1, 2023.

ClassStatuteRateExempt per beneficiary
Immediate relatives, including a parent, grandparent, sibling, child, adopted child, any lineal descendant, a person the decedent stood in an acknowledged parental relation to for ten years, that person's descendants, and the spouse of anyone on the list77-2004(1)(b) and (2)1 percent$100,000
Remote relatives, meaning an aunt, uncle, niece or nephew by blood or adoption, their lineal descendants, and the spouses of those people77-200511 percent$40,000
Everyone else77-200615 percent$25,000

A surviving spouse pays nothing on any amount under 77-2004(3), and neither does a beneficiary under twenty-two years of age. That age exemption reaches every class rather than relatives alone, because each rate section carries its own copy of it: 77-2004(3) for immediate relatives, 77-2005(2) for remote relatives, and 77-2006(2) in wording that names no class at all.

Watch the date qualifier when you read those sections yourself. Each one prints the pre-2023 figures alongside the current pair, so 13 percent above $15,000 and 18 percent above $10,000 are real text in the live statute and wrong as today's answer. A figure lifted out of the middle of one of these sections is wrong about half the time.

Two Nebraska amounts that do not answer a tax question at all are the affidavit thresholds. Neb. Rev. Stat. 30-24,125 collects personal property by affidavit up to $100,000, and 30-24,129 passes Nebraska real property by affidavit up to $100,000 of the decedent's interest measured from the assessment rolls. Those figures pick a court route. The Nebraska small estate routes explain what each one is for. Being under either says nothing about a federal return, and being over either says nothing either.

The Federal Number For A 2026 Death

Internal Revenue Code section 2010(c)(3)(A) sets the basic exclusion amount at $15,000,000. Public Law 119-21, section 70106(a)(1), enacted July 4, 2025, substituted that figure for $5,000,000, and section 70106(a)(3) of the same act struck the subparagraph that had been scheduled to cut the exclusion roughly in half at the start of 2026.

The IRS publishes the filing threshold by year of death:

Year of deathFiling threshold
2024$13,610,000
2025$13,990,000
2026$15,000,000

Section 6018(a) sets the measure, and it has three parts worth reading in order.

  • Paragraph (1) requires a return where the gross estate at the death of a citizen or resident exceeds the basic exclusion amount that section 2010(c) sets for the calendar year containing the date of death.
  • Paragraph (3) reduces that threshold, though never below zero, by the decedent's adjusted taxable gifts made after December 31, 1976 and by the specific exemption allowed under the repealed section 2521 for gifts made after September 8, 1976. Heavy lifetime giving lowers the bar the estate has to clear. The IRS states the same arithmetic from the other side, as the gross estate increased by those gifts, measured against the table above.
  • Paragraph (2) sets a separate and much lower threshold for the estate of a nonresident who was not a United States citizen: a return is required once the part of the gross estate situated in the United States exceeds $60,000. That number matters in Nebraska farm and ranch country, where foreign-owned ground is not unusual. A family in that position can owe a Form 706 on a quarter section near Ogallala while the Nebraska neighbor with identical land owes nothing.

Above the threshold, the rate schedule at section 2001(c) tops out at $345,800 plus 40 percent of the excess over $1,000,000 of taxable transfer. Only the amount above the exclusion is reached, so no whole estate is taxed at 40 percent.

The return is due nine months after the date of death under section 6075(a). Diary that date the day the family opens the estate, because it runs from the death rather than from the appointment of a Nebraska personal representative, and a Nebraska informal probate is often not opened for several weeks. Nebraska executor duties covers the rest of the appointment calendar.

Section 2010(c)(3)(B) indexes the exclusion for a decedent dying in a calendar year after 2026, using calendar year 2025 as the base and rounding to the nearest $10,000. The figure moves every January, so check the year of death rather than the year you are reading.

Plenty of Nebraska plans were drafted around the warning that the exclusion would drop sharply at the start of 2026. That drop did not arrive. If a trust in your documents was built to catch a much smaller exclusion, it deserves a review, because the structure may now trade away a basis step-up the family no longer needs to give up. Nebraska estate planning is where that review fits.

The Small Estate That Should Still File

A Nebraska estate nowhere near $15,000,000 has one good reason to file a Form 706 anyway, and missing it is expensive.

Section 2010(c)(4) lets a surviving spouse inherit the deceased spousal unused exclusion amount, the portion of the first spouse's exclusion that went unused. Section 2010(c)(5)(A) attaches the condition: that amount may not be taken into account unless the executor of the first spouse's estate files an estate tax return computing it and makes the election on that return. The election is irrevocable, and no election may be made on a return filed after the time prescribed by law, extensions included.

So the decision belongs to the first spouse's executor, at the moment when the estate plainly owes no tax and filing looks like wasted work. Nothing in Nebraska law prompts that thought, because Nebraska has no death tax return of its own to trigger it, and the county inheritance tax proceeding never asks the question. Raise it with a CPA before the nine months run.

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The Two Taxes Deduct Each Other, And The Calendars Do Not Line Up

This is the part of the Nebraska answer that has no equivalent in a state with no death tax, and it is where an executor of a large Nebraska estate saves real money.

Nebraska deducts the federal tax. Neb. Rev. Stat. 77-2018.04 lists what a county court allows as a deduction from the value of the property subject to Nebraska inheritance tax, and subdivision (5) is "any federal estate tax paid, payable, or expected to become payable, after deduction of all applicable credits, which is attributable to property subject to Nebraska inheritance taxation." Read the verbs. Nebraska allows the deduction on a figure that is merely expected, so a federal bill still being computed does not stall the county determination.

The same section allows four other deductions that are easy to leave off a worksheet: the funeral, including interment and a gravesite marker; every expense of administration that accrues because of the death, naming attorney fees, court costs, expenses concerning property outside probate and the cost of selling estate assets, while excluding the day-to-day cost of running a business the decedent already ran; the expenses of the last illness incurred within six months of the death; and every other debt the decedent owed at death that has since been paid.

The federal tax deducts Nebraska. Internal Revenue Code section 2058(a) determines the taxable estate by deducting from the gross estate "the amount of any estate, inheritance, legacy, or succession taxes actually paid to any State," in respect of property included in the gross estate. The Nebraska inheritance tax qualifies. The federal wording is stricter than Nebraska's on one word: actually paid, with no room for an expected amount.

Now put the two due dates side by side. The federal return is due at nine months under section 6075(a). The Nebraska inheritance tax is not due until twelve months after the death under section 77-2010. On an estate large enough to owe both, the state tax is normally still unpaid on the day the Form 706 goes out, which is exactly the condition section 2058(a) refuses.

Section 2058(b)(1) is the release valve. The deduction covers taxes actually paid and claimed before the later of four years after the filing of the section 6018 return, or one of several later dates tied to a Tax Court petition, a section 6161 or 6166 extension, or a pending refund claim. So the sequence for a Nebraska estate that owes federal tax runs: file the 706 at nine months, pay and finish the county inheritance tax determination at twelve months, then claim the section 2058 deduction inside the four-year window.

One more Nebraska clock sits inside that window and it is the one that bites. Section 77-2010 adds a penalty of five percent per month, up to twenty-five percent of the unpaid tax, for failing to file an appropriate proceeding to determine the inheritance tax within twelve months of the death. Filing a petition or application for probate, or an application under section 77-2018.07 with the tentative payment, inside those twelve months counts as an appropriate proceeding and stops the penalty, and the county court may abate it for good cause. The penalty punishes silence rather than nonpayment, so an executor waiting on a federal valuation still has to open the county proceeding on time.

What Lands In The Federal Gross Estate

The IRS counts everything the decedent owned or held certain interests in at death, at fair market value: cash and securities, real estate, insurance, trusts, annuities, business interests and the rest. Debts, administration expenses, and property passing to a surviving spouse or a qualified charity come off to reach the taxable estate.

For a Nebraska family the gap between the probate estate and the federal gross estate is usually opened by the same tools chosen to skip probate. How to avoid probate in Nebraska explains each mechanism; here is how each one lands on a tax return.

  • A recorded transfer-on-death deed. Neb. Rev. Stat. 76-3414 says the deed has no effect on the transferor's ownership during life, and 76-3415 transfers the interest at death. The owner still owns the ground the day before dying, so it sits in the federal gross estate. It sits in the Nebraska inheritance tax base too, and 76-3420(b) says a purchaser or lender for value from the beneficiary does not take title free of the section 77-2003 lien.
  • Payable-on-death and beneficiary-form accounts. They skip the county court and they count here.
  • Joint tenancy with right of survivorship. Internal Revenue Code section 2040(a) pulls the whole value into the gross estate except the part the survivor can show originally belonged to them and was never acquired from the decedent for less than full consideration. Section 2040(b) replaces that test for a qualified joint interest between spouses and includes half, whoever paid. Nebraska's own inheritance tax runs the same consideration-furnished test in 77-2002(1)(d), and the two texts are nearly word for word, differing mainly where the federal section says "money or money's worth" and Nebraska says "money or property." So the two taxes ask the same question about the same account.
  • Retirement accounts and life insurance the decedent owned or controlled. Ownership drives inclusion, and a beneficiary designation does not undo it. Nebraska treats one slice of this differently: section 77-2002(3) says life insurance proceeds received by the trustee of an inter vivos or testamentary trust are not subject to Nebraska inheritance tax, unless the decedent's estate is the beneficiary of that trust.

The Deductions That End The Question For Most Families

The marital deduction. Property left outright to a surviving spouse who is a United States citizen passes free of federal estate tax with no dollar cap, which is why most married couples owe nothing on the first death. Internal Revenue Code section 2056(d)(1) disallows the deduction where the surviving spouse is not a United States citizen, and the same paragraph switches off section 2040(b) as well. With 2040(b) gone, the general rule at 2040(a) takes over and pulls the whole value of jointly held Nebraska property into the gross estate, except the part the survivor can show originally belonged to them and never came from the decedent for less than adequate and full consideration. The marital deduction can disappear and the joint property can be fully included, in one stroke, over citizenship.

Section 2056(d)(2) leaves a repair open. The deduction survives for property passing to the spouse in a qualified domestic trust, and property counts as passing into one if it is transferred to such a trust before the return is filed, or irrevocably assigned to one on or before that date under an assignment enforceable under local law. Section 2056(d)(4) closes the gap a different way where the surviving spouse becomes a United States citizen before the return is filed and was a United States resident at all times between the death and the naturalization.

Nebraska does not repeat that trap. The spousal exemption in 77-2004(3) exempts interests passing to the surviving spouse "by will, in the manner set forth in section 77-2002, or in any other manner," with no citizenship condition anywhere in the sentence. A non-citizen surviving spouse in Omaha can owe zero Nebraska inheritance tax on the same property that costs the estate a federal marital deduction.

The charitable deduction, and the Nebraska condition attached to it. Internal Revenue Code section 2055(a) deducts bequests to the United States, a state or a political subdivision for exclusively public purposes, and bequests to a corporation operated exclusively for religious, charitable, scientific, literary or educational purposes whose net earnings do not benefit a private stockholder. There is no dollar cap.

Nebraska reaches a similar result through two exemptions rather than a deduction, and one of them carries a condition worth reading before a family assumes it applies. Section 77-2007.03 exempts property transferred to the United States or to Nebraska, including any governmental subdivision, department, agency or instrumentality. Section 77-2007.04 exempts a gift to an organization operating exclusively for religious, charitable, public, scientific or educational purposes with no part inuring to a private stockholder, but only where one of three things is true: the organization is organized under the laws of Nebraska or of the United States, the property transferred is limited for use within Nebraska, or the charity's home state either charged no death tax on gifts to Nebraska charities or granted a reciprocal exemption at the date of death. A gift to an out-of-state charity has to clear that third test rather than the first two.

Debts, funeral costs and the cost of administering the estate also come off the federal figure, which is the same list Neb. Rev. Stat. 77-2018.04 runs on the county side.

Who Pays A Federal Bill: Nebraska Answers That In Section 77-2108

A federal estate tax bill arrives as one number owed by the estate. Deciding whose inheritance shrinks to pay it is a state-law question, and Nebraska answers it in a section most readers never find, because the section sits inside the run of sections that governs the dead state tax.

Start where the probate code sends you. Neb. Rev. Stat. 30-24,114 is one sentence long: "Estate taxes shall be apportioned as provided in section 77-2108." That is the whole of the Nebraska Probate Code on the subject.

Section 77-2108 reaches the federal tax by its own words. It applies where a personal representative, executor, administrator, trustee or other fiduciary has paid or may be required to pay a transfer tax levied under sections 77-2101 to 77-2116 "or under the provisions of any federal estate or generation-skipping transfer tax law," whenever enacted, on property required to be included in the gross estate. Section 77-2109 removes any doubt by defining persons interested in the estate "with respect to both state and federal taxes." The 2007 sunset of the Nebraska tax did not touch either sentence, so the apportionment rule outlived the tax it was written beside.

Here is how the section works.

  • The default is proportional. The tax is apportioned among the persons interested in the estate as near as may be in the proportion that the value of each person's property, interest or benefit bears to the total value received by all of them.
  • Exemptions and deductions travel with the share. The section requires allowances to be made for any exemptions the taxing law grants and for any deductions it allows, including the marital deduction, before the proration is struck. A share that generated the marital deduction does not carry the tax it never caused.
  • The will wins. The default yields where the decedent's will directs otherwise, and where an inter vivos instrument directs apportionment within the fund that instrument deals with. Read the tax clause before you touch the statute.
  • Life estates and remainders come out of the corpus. Where someone holds an income interest, an estate for years, a life estate or another temporary interest, the tax on both the temporary interest and the remainder is charged against the corpus of that property or fund without apportionment between them.
  • Property the representative never held is still reachable. Section 77-2110 lets the personal representative recover the proportionate share from the fiduciary holding a trust corpus, and in every other case from the persons interested in the estate, for property that never came into the representative's hands.
  • Anyone who overpaid can claim contribution. Section 77-2111 gives a fiduciary who paid the tax, and any person who paid more than their apportioned share, a right to a just and equitable contribution from those who paid less.
  • Two courts, in sequence. Section 77-2112 gives the county court where the estate is being probated jurisdiction to hear and determine the apportionment inside the probate proceeding, and gives the district court jurisdiction over an action in equity for an accounting and contribution once the county court has determined the apportionment.

The inheritance tax has its own, separate direction rule. Section 77-2038 lets a decedent's will direct how the inheritance tax is apportioned, and reaches inter vivos instruments as well. Treat the two as different questions on the same estate.

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Nebraska Has No Estate Tax Waiver. It Has A County Court Lien Release.

The most common request that wastes a Nebraska executor's time is a bank, title company or transfer agent asking for a state tax clearance before releasing an asset. There is no such Nebraska document for a modern death. The state estate tax return that section 77-2113 describes belongs to the tax that ended with deaths before 2007.

What Nebraska does have is a lien, and a court order that lifts it.

The lien. Section 77-2003 makes the inheritance tax a lien on the real property subject to it until paid or otherwise terminated under section 77-2037, with an express carve-out: no interest in property passing from the decedent to the surviving spouse is subject to the lien.

When it dies on its own. Section 77-2037 ends the lien on the first of three events, regardless of any defect in the proceeding that determined the tax or in the court's jurisdiction to determine it. Ten years from the date of death, after which no action may be maintained to determine, assess or collect the tax, unless the court determined the amount inside that ten-year window, in which case the lien and the right to collect run five more years from that determination. Payment of the amount the county court finally determined for the property described in the proceeding. Or a release under section 77-2039.

How to get it released early. Section 77-2039 lets any county court discharge any or all property from an inheritance tax, Nebraska estate tax or generation-skipping transfer tax lien, and set the terms of the discharge. Anyone who wants one files a written application with the county court. The county attorney either consents by entering a voluntary appearance and waiver of notice, or has seven days from the filing to show in writing why the release should not be granted or to specify the terms on which it should. That is the document a Nebraska closing agent should be asking for. Nebraska county courts is where the application goes.

Two adjacent rules for out-of-state facts. Section 76-3420(b) says a purchaser or lender for value from a transfer-on-death beneficiary does not take free of the section 77-2003 lien, even though subsection (a) protects that same buyer against every other claim of the estate. And section 77-2017 provides that where a foreign executor or administrator transfers stocks or loans standing in a Nebraska decedent's name, the tax is paid to the proper county treasurer on the transfer, and the corporation making the transfer becomes liable for the tax if it knew before the transfer that the stocks or loans were subject to it. Nebraska ancillary probate covers the rest of the out-of-state pattern.

No Nebraska Gift Tax, And The Federal Return Is Nebraska's Trigger

Nebraska imposes no gift tax. The chapter 77 index lists 2,741 sections and not one of those catchlines imposes a gift tax, while the inheritance tax, the pre-2007 estate tax and the income tax are each plainly named in that same index. The absence is the index speaking rather than a search that failed.

Nebraska borrows the federal filing requirement instead. Section 77-2002(2) provides that where a decedent transferred an interest in property "for which a federal gift tax return is required to be filed under the provisions of the Internal Revenue Code," within the three years ending on the date of death, and the transfer was not a bona fide sale for adequate and full consideration, the transfer is deemed to have been made in contemplation of death and falls under subsection (1). That means it is taxed at the inheritance tax rates in sections 77-2004 to 77-2006.

The same subsection shuts the door on older gifts. No transfer made before that three-year period "shall be treated as having been made in contemplation of death in any event." A gift made four years before the death is outside the reach of the section, whatever the giver's motive was.

So a Nebraska family that made large gifts near the end should expect the county court to ask for the federal gift tax returns, and should keep them with the estate file. Nebraska did not write a gift tax. It wrote a rule that reads yours.

The Tax Nebraska Charges An Estate Every Year Is An Income Tax

An open Nebraska estate that earns money owes Nebraska income tax on what it earns, and that filing gets confused with a death tax every spring.

Neb. Rev. Stat. 77-2717(2) ties the state return to the federal one directly: in all instances where a fiduciary income tax return is required under the Internal Revenue Code, a Nebraska fiduciary return shall be filed. The fiduciary is responsible for making the return for the estate whether the income is taxable to the estate or to the beneficiaries, and the return must include a statement of each beneficiary's distributive share of net income where that income is taxable to the beneficiary. The narrow exception in the same subsection covers a simple trust, not an estate.

Cash rent on inherited Nebraska farm ground is the usual way an out-of-state family trips this without expecting to. A federal Form 1041 pulls a Nebraska Form 1041N along behind it.

Two cautions before you carry a rate forward from anything, including the statute itself.

Section 77-2717 was amended in the 2026 session by Laws 2026, LB901, section 25, and section 39 of that act makes section 25 operative on January 1, 2027. The Nebraska Revisor of Statutes prints "Operative Date: January 1, 2027" directly under the amendment chain on the section's own page, which means the text published there today is the version that takes effect then rather than the version in force now. Read the filing-year rate, the forms and the instructions from the Nebraska Department of Revenue rather than from the published section.

The decedent's own final returns are separate again. A federal Form 1040 and a Nebraska Form 1040N for the year of death cover the income the person earned while alive, and the estate's 1041 and 1041N pick up from the date of death forward. Nebraska probate accounting covers how those filings land in the estate's own records.

What A Nebraska Family Should Actually Do

  1. Add it up once, the federal way. Include the house, the farm or ranch ground, life insurance the decedent owned, retirement accounts, mineral interests and anything carrying a beneficiary form. If the total sits far below $15,000,000, no federal estate tax applies and no Form 706 is required on the threshold alone. Check the portability question before closing that file, because the deadline is the same nine months.
  2. Then run the inheritance tax separately, per beneficiary. The federal answer says nothing about the Nebraska one. A $400,000 estate split among nieces and nephews produces a county tax bill while a $2,000,000 estate passing to a spouse produces none.
  3. Open the county proceeding inside twelve months even if the numbers are unsettled. Section 77-2010 penalizes the failure to file an appropriate proceeding at five percent a month up to twenty-five percent, and a probate petition or a section 77-2018.07 tentative payment stops the clock.
  4. Sequence the two deductions. File the 706 at nine months, finish and pay the county inheritance tax, then claim the section 2058 deduction inside the four-year window that section 2058(b)(1) allows. On the county side, section 77-2018.04(5) already lets you deduct a federal tax that is only expected.
  5. Read the will's tax clause before you distribute. Neb. Rev. Stat. 77-2108 apportions a federal bill by default and yields to a will that directs otherwise, and section 77-2110 is a recovery action against people who have already been paid. Withholding is cheaper than suing.
  6. Ask for a lien release, not a waiver. If a bank or title company wants a tax clearance, the Nebraska document is a section 77-2039 application to the county court, and section 77-2003 already exempts anything passing to the surviving spouse from the lien.
  7. Get help when the facts are hard. A farm or ranch, a closely held business, producing mineral interests, a non-citizen surviving spouse, property in a state that charges its own estate tax, or a gross estate anywhere near the federal threshold are the cases where a CPA and an estate attorney earn their fee.

If you are settling a house rather than planning around a tax, selling inherited property in Nebraska picks up from here. If you have not opened the estate yet, start with the Nebraska probate process.

Frequently Asked Questions

Does Nebraska have an estate tax?

Not for a modern death. Section 77-2101.01(1) levies the Nebraska estate or excise tax only for decedents dying before January 1, 2007, and section 77-2101.02 cuts off the Nebraska generation-skipping transfer tax at the same date. Laws 2007, LB367, sections 6 and 7 wrote those cutoffs in. The sections were never deleted, because the estate of someone who died in 2005 can still be open, so the run of sections that 77-2102 calls sections 77-2101 to 77-2116 still returns 22 rows from the chapter 77 index, only three of them marked repealed. Read the death date in section 77-2101.01 before you read anything else in that run. Nebraska does still charge an inheritance tax, which is a different tax paid to a different office.

How large does a Nebraska estate have to be before federal estate tax applies?

For a death in 2026 the basic exclusion amount is $15,000,000 per person. Internal Revenue Code section 2010(c)(3)(A) carries that figure, and Public Law 119-21, section 70106(a)(1), enacted July 4, 2025, substituted it for $5,000,000 and struck the subparagraph that would have cut the exclusion in half at the start of 2026. The IRS filing threshold table gives $13,610,000 for a 2024 death, $13,990,000 for 2025 and $15,000,000 for 2026. Section 6018(a)(3) then reduces that threshold, though never below zero, by the decedent's adjusted taxable gifts made after December 31, 1976 and by the pre-1977 specific exemption, so heavy lifetime giving lowers the bar the estate has to clear. The return is due nine months after the death under section 6075(a).

Do the Nebraska inheritance tax and the federal estate tax cancel each other out?

They reduce each other, in both directions, and the calendars do not line up. Neb. Rev. Stat. 77-2018.04(5) lets a county court deduct federal estate tax that is paid, payable or expected to become payable, after all applicable credits, to the extent it is attributable to property subject to Nebraska inheritance tax. Internal Revenue Code section 2058(a) runs the other way and deducts state inheritance taxes actually paid on property included in the gross estate. The catch is timing. The federal return is due at nine months under section 6075(a) and the Nebraska inheritance tax is not due until twelve months under section 77-2010, so the state tax is usually unpaid when the Form 706 is filed. Section 2058(b)(1) allows the deduction to be claimed up to four years after that return is filed.

Who pays a federal estate tax bill in Nebraska, the estate or the beneficiaries?

Neb. Rev. Stat. 77-2108 answers it, and it reaches the federal tax by its own words. The section applies where a fiduciary has paid or may be required to pay a transfer tax under sections 77-2101 to 77-2116 or under any federal estate or generation-skipping transfer tax law, whenever enacted. Section 77-2109 confirms the reach by defining persons interested in the estate with respect to both state and federal taxes. The default is an equitable apportionment in proportion to the value each person received, with allowances made for exemptions and deductions the taxing law grants, including the marital deduction. A will, or an inter vivos instrument directing apportionment inside its own fund, overrides the default. Section 30-24,114 of the probate code exists only to point the reader at section 77-2108.

Is there a Nebraska estate tax waiver or clearance I have to get?

There is no Nebraska estate tax return or waiver for a modern death, because the tax those forms served ended with deaths before January 1, 2007. What Nebraska does have is a lien. Section 77-2003 makes the inheritance tax a lien on the real property subject to it until paid or terminated under section 77-2037, with no lien on any interest passing to the surviving spouse. Section 77-2039 gives the county court power to release or discharge that lien on written application, and the county attorney either enters a voluntary appearance and waiver of notice or has seven days to show why the discharge should not be granted. Section 76-3420(b) adds that a purchaser or lender for value from a transfer-on-death beneficiary does not take free of that lien.

Does Nebraska charge a gift tax?

Nebraska imposes no gift tax of its own. It borrows the federal one as a trigger instead. Section 77-2002(2) provides that a transfer of an interest in property for which a federal gift tax return is required, made within the three years ending on the date of death and not a bona fide sale for full consideration, is deemed made in contemplation of death and is taxed at the inheritance tax rates in sections 77-2004 to 77-2006. The same subsection closes the door on anything older, saying no transfer made before that three-year period shall be treated as made in contemplation of death in any event. So the federal gift tax return is the document a Nebraska county court will look for.

Related Guides

This page describes Nebraska and federal law broadly rather than advising on one estate. Tax outcomes turn on the date of death, on deeds, and on figures that change from family to family, so take yours to a CPA or a tax attorney, and confirm anything procedural with the clerk of the county court in the county where the decedent lived.

Sources:

It is not legal advice.

Information current as of September 10, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Nebraska can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

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