Nebraska Homestead Exemption

Quick Facts

• What it does: Nebraska’s homestead exemption reduces or eliminates property taxes on a primary residence for qualifying seniors, disabled individuals, certain veterans, and long-term care residents by exempting a portion of the home’s value from taxation.
• Who qualifies: Homeowners age 65 or older, totally disabled individuals, qualified disabled veterans or their surviving spouses, and homeowners who have moved to a nursing home but keep their home vacant may qualify if income and value thresholds are met.
• Benefit size: Exemptions range from 10% to 100% of up to $95,000 of the home’s value (adjusted annually). Lower-income households receive larger exemptions. Some categories (Category 4 or 5 veterans) can exempt the entire value regardless of income.
• Application window: February 1 through June 30 annually. First-time applicants file Form 458; returning applicants may receive a preprinted Form 458R to certify continuing eligibility.

Program Overview

Nebraska’s Constitution authorizes property tax exemptions to protect seniors and vulnerable residents from losing their homes due to rising taxes. The program is administered jointly by county assessors and the Nebraska Department of Revenue, which sets annual income and valuation limits. The exemption applies to property taxes levied by counties, cities, school districts, and other political subdivisions.

There are six categories of applicants, each with unique criteria:

1. Category 1: Individuals age 65 or older.
2. Category 2: Veterans totally disabled by non-service-connected disabilities, or paraplegic/quadriplegic individuals.
3. Category 3: Individuals totally disabled and drawing Social Security disability benefits.
4. Category 4: Veterans or widows/widowers of veterans whose service-connected disability is 100% due to wartime service.
5. Category 5: Veterans or widows/widowers of veterans who are totally disabled due to service-connected disabilities; this category often results in 100% exemption regardless of income.
6. Category 6: Individuals who have transferred their home to a qualifying trust but retain beneficial ownership, or residents temporarily in a nursing home whose property remains unoccupied or occupied by a spouse/dependent.

The amount of exemption depends on the category and combined household income. Household income includes taxable income, Social Security (with partial exclusions), pensions, annuities, interest, dividends, and certain nontaxable benefits. The Department publishes an annual table showing income ranges and corresponding exemption percentages.

Eligibility Details

Ownership and Occupancy

• Applicants must own and occupy the property as their legal residence on January 1. Ownership can be held individually, jointly, or through certain trusts.
• If the homeowner moves to a nursing home or assisted living facility, the exemption can continue if the home is not rented and remains available for their occupancy.
• Married couples must both sign the application unless one is incapacitated; a power of attorney may sign on behalf of the applicant.

Income and Valuation Limits

• Value limit: The maximum value of the home plus land (not exceeding one acre within a city or 160 acres in rural areas) must fall below the statutory limit, which adjusts annually (e.g., $95,000 for 2024). If the value exceeds the limit, only the portion under the limit qualifies for exemption.
• Income limit: The Department calculates “household income” by adding federal adjusted gross income, nontaxable Social Security, Railroad Retirement, military retirement, and other nontaxable benefits, then subtracting medical expenses exceeding 4% of income and certain veterans’ disability payments. The income brackets determine the percentage of exemption.

Special Veteran Rules

• Category 4 and 5 applicants often receive full exemption regardless of income, provided the home value is within limits. Veterans must submit VA certification (Form 458 Schedule I) verifying disability status.
• Surviving spouses remain eligible if they do not remarry and continue to occupy the home. Surviving spouses of veterans who died in the line of duty also qualify.

Disability Documentation

• Social Security or Railroad Retirement disability award letters satisfy proof for Categories 2 and 3. If the applicant does not receive such benefits, a physician must complete Form 458 Schedule B.
• Blind residents may also qualify under disability categories with proper certification.

Benefit Calculation

• The exemption removes a percentage of the first $95,000 (or the applicable limit) of the home’s value from taxation. For example, if the home’s taxable value is $120,000 and the applicant qualifies for a 60% exemption, $57,000 of value is exempt, reducing the taxable value to $63,000.
• The assessor applies the exemption to the tax roll before bills are issued, so homeowners see reduced taxes automatically. There is no direct cash payment.
• Counties receive state reimbursement for part of the lost revenue, but the homeowner’s savings are immediate.

Application Steps

1. Gather paperwork: Deed or property tax statement, proof of age or disability, Social Security numbers, federal and state tax returns, documentation of medical expenses, and VA disability certifications where applicable.
2. Obtain Form 458: Available from county assessors or the Department of Revenue website. Schedules A through I cover specific categories (e.g., Schedule I for veterans, Schedule B for physician certification).
3. Complete the form: Provide personal information, property description, income details, and category selection. Attach required schedules and supporting documents.
4. Submit to county assessor: File between February 1 and June 30. Some counties accept mailed applications; others require in-person submission for document verification.
5. Respond to assessor inquiries: The assessor may request additional documentation. Provide it promptly to avoid denial.
6. Receive approval: The assessor forwards approved applications to the Department of Revenue. Applicants typically receive confirmation letters in late summer.
7. File annual certifications: Most categories must file a Form 458R each subsequent year to confirm continued eligibility. Counties mail the form in January. Complete and return by June 30.

Documentation Checklist

• Proof of age (driver’s license, birth certificate, passport)
• Social Security or VA disability award letters
• Federal and Nebraska income tax returns (if filed)
• 1099 statements for pensions, interest, dividends
• Records of medical and prescription expenses
• Property tax statement or valuation notice
• Trust documents (if property held in trust)
• Power of attorney documents (if someone files on your behalf)

Timing and Renewal

• Initial applications must be filed by June 30. Late filings may be accepted under hardship provisions but require approval by the county board of equalization.
• Annual renewals (Form 458R) are due by June 30. Failure to file results in loss of the exemption for that year. Counties often send reminders—respond immediately.
• If your income or ownership status changes, notify the assessor. Moving, selling the home, or significant income increases can impact eligibility.

Coordination with Other Relief

• Property Tax Credit Program: Nebraska automatically applies a statewide credit on tax bills. The homestead exemption stacks with this credit, further lowering taxes.
• Senior property tax deferral: Some counties allow seniors to defer taxes. Combining deferral with the homestead exemption can significantly reduce immediate costs but consider repayment obligations.
• Utility and weatherization assistance: Agencies on Aging can connect you with LIHEAP and weatherization services to reduce energy costs, complementing property tax relief.
• Estate planning: Consult an attorney before transferring property into trusts or gifting it to family; the exemption requires retaining beneficial ownership.

Strategic Tips

• Document medical expenses: Large out-of-pocket costs reduce household income for eligibility calculations. Keep receipts, insurance statements, and pharmacy printouts.
• Appeal valuation: If your home’s assessed value exceeds the limit, consider appealing during the June valuation protest period. A successful appeal may restore eligibility.
• Update status changes: Report the death of a spouse, changes in disability status, or long-term care moves promptly. Spouses may need to refile under a different category.
• Use electronic tools: Some counties provide online portals to check application status. Create an account and monitor updates, especially if documentation is pending.
• Seek assistance: Local volunteer tax preparers (VITA), senior centers, and veterans service officers are trained to help complete Form 458 and gather documentation.

Example Scenarios

1. Married senior couple: Harold (68) and Linda (66) live in Lancaster County. Their combined income is $43,000 after deducting $5,000 of unreimbursed medical expenses, qualifying them for a 60% exemption. On a $150,000 home, they save roughly $1,200 annually.
2. Disabled veteran: Sergeant Miller, a 100% service-connected disabled veteran, qualifies under Category 5. His $180,000 home receives a full exemption regardless of income, reducing his property tax bill to zero. The state reimburses the county, and he focuses resources on healthcare.
3. Nursing home resident: Mrs. Thompson moves to a nursing facility but keeps her home vacant. Her daughter files under Category 6 with documentation from the care facility. The exemption continues, preventing tax debt while the family decides whether to sell.

Common Mistakes to Avoid

• Missing the deadline: Applications received after June 30 are typically denied. Mark calendars and request reminders from family or caregivers.
• Incomplete income reporting: Failure to list nontaxable Social Security or pension income is a frequent issue. The Department cross-checks IRS data, so omissions trigger penalties.
• Insufficient disability proof: Submitting expired physician statements or missing VA certifications delays approval. Ensure documents reflect current status.
• Trust complications: Placing the home in an irrevocable trust without retaining beneficial use can disqualify the property. Seek legal advice before transferring title.
• Not filing annual certification: Even if nothing changes, you must return the renewal form each year. Non-compliance removes the exemption until reapproved.

Frequently Asked Questions

Is the exemption retroactive? No. It applies only to the current tax year. Late filings cannot reclaim prior years’ taxes.

Do renters qualify? No. The exemption is limited to homeowners. Renters may explore other assistance such as the Nebraska Renters Credit if enacted locally.

How is household income calculated for married couples filing separately? Combine both spouses’ incomes, even if filing separate tax returns. Include income of any resident dependents.

Can I apply if my home is in a trust? Yes, if you retain a life estate or the trust is revocable with you as beneficiary. Provide trust documents with the application.

Will my mortgage company be notified? Counties update tax rolls with exemption codes. Mortgage servicers adjust escrow based on the reduced bill once the exemption is applied.

Additional Resources

• Nebraska Department of Revenue Homestead Exemption information: https://revenue.nebraska.gov/programs-services/property-tax/homestead-exemption
• Form 458 and instructions: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/tax-forms/property/homestead/f_458.pdf
• County assessor directory: https://revenue.nebraska.gov/about/office-directory/county-officials
• Area Agencies on Aging in Nebraska: https://aging.nebraska.gov/
• Nebraska Veterans Affairs: https://veterans.nebraska.gov/

By staying organized, tracking income carefully, and renewing each year, Nebraska homeowners can significantly reduce property tax burdens and remain in their homes for the long term.