Nebraska Nebraska Fiduciary Estimated Income Tax Payment Voucher

Nebraska Fiduciary Estimated Income Tax Payment Voucher
Form 1041N-ES
2025

Nebraska
Fiduciary

Income Tax Booklet
Included in this Booklet are:

Form 1041N;
Schedules I, II, and III;
and Use Tax information.

Electronic filing and payment options are available.
See instructions.

Questions?

revenue.nebraska.gov
Sign up for a FREE subscription service at the Nebraska Department
of Revenue’s website to get email updates on your topics of interest.
800-742-7474 (NE or IA) or 402-471-5729
8-305-2025

2025 Nebraska Fiduciary Income Tax Return
What’s New
				
	 	

	 	

				

	 	

	 	

	 	

	 	

				

				

				

				
				

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Instructions

Individual and Fiduciary Income Tax Rate Change (LB 754, 2023). For the 2025 taxable year, the
highest rate for Nebraska taxable income is reduced to 5.20%.
Affordable Housing Tax Credit Act (LB 182, 2025). The definition of taxpayer was updated to
classify nonprofit corporations as taxpayers eligible for the credit.
If an owner of a qualified project is a pass-through entity, the credit shall be allocated to some or all
the partners, members, or shareholders of the owner of the qualified project. Any pass-through entity
that receives an allocation of the credit, either from the owner of the qualified project or from another
pass-through entity, may further allocate the tax credit among some or all of the partners, members, or
shareholders, or transfer, sell, or assign all or a portion of the tax credit to a taxpayer. A pass-through
entity may allocate the tax credit in any manner agreed to by its partners, members, or shareholders. A
partner, member, or shareholder of a pass-through entity may transfer, sell, or assign all or part of his
or her ownership interest, including his or her interest in the tax credits authorized. A taxpayer may
transfer, sell, or assign all or a portion of the tax credit to another taxpayer.
Bullion - Gain or Loss on the Sale or Exchange of Bullion (LB 1317, 2024). Individuals, corporations,
and fiduciaries must add to federal adjusted gross income or federal taxable income any net capital
loss from the sale or exchange of gold or silver bullion to the extent included in federal adjusted gross
income or federal taxable income. Individuals, corporations, and fiduciaries must subtract from federal
adjusted gross income or federal taxable income any net capital gain from the sale or exchange of gold
or silver bullion to the extent included in federal adjusted gross income or federal taxable income.
The adjustments do not apply to a taxable distribution of a gain or loss on the sale of bullion from a
retirement plan account.
Cast and Crew Nebraska Act (LB 937, 2023 and LB 650, 2024). Beginning with tax year 2025,
a production company may be eligible to receive refundable income tax credits equal to 20% of
the qualifying expenditures incurred by the production company directly attributable to a qualified
production activity. The tax credit may be increased by an additional 15% if certain qualifications are
met. Qualified production activity means a full-length film, made-for-television movie, television series
of at least five episodes, or streaming television series.
The total amount of tax credits allowed for each State fiscal year is $500,000. The maximum allowable
tax credit claimed under the Act in any single taxable year for any qualified production activity that is
a full-length film, made-for-television movie, television series of at least five episodes, or streaming
television series shall not exceed $500,000.
A production company must file an application for qualification with the Nebraska Department of
Economic Development (DED) prior to the start of principal production photography to determine
eligibility of the production activity. Applications are considered in the order they are received. If
DED approves the application, it notifies the production company and issues a screen credit that can
be used to meet the requirement for the tax credit.
To receive tax credits, the production company must submit an application for the tax credit to DED
after completing the qualified production activity. Applications are considered in the order they are
received. If DED determines the application is complete and the production company qualifies for
the tax credits, it will approve the application, notify the production company of the approval, and
conduct an audit of each qualified production activity. Once the audit has been completed, DED will
determine the value of the tax credit and issue a tax credit certification. A production company claims
the tax credit by attaching the tax credit certification to its tax return for the taxable year in which the
certificate was issued, or in the three taxable years immediately following the taxable year in which it
was issued. The tax credits can be transferred to any Nebraska taxpayer at any time during the taxable
year in which the certificate was issued, or in the three taxable years immediately following the year
of issuance. The transferee must pay the transferor at least 85% of the value of the transferred credits
in order to acquire the credits.
For more information, visit Cast and Crew Nebraska Act (CCNA) - Nebraska Department of Economic
Development.
Child Care Tax Credit Act (LB 182, 2025). The definition of taxpayer under the Child Care Tax
Credit Act (Act) was expanded to include insurance companies subject to premium and retaliatory
taxes imposed by Neb. Rev. Stat. §§ 44-150, 77-908, or 81-523 and financial institutions subject to
the franchise tax imposed by Neb. Rev. Stat. §§ 77-3801 to 77-3807. The nonrefundable tax credit
for contributors allowed under the Act can be used to offset any premium and retaliatory taxes or any
franchise tax due under the above-noted statutes.				

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Community Development Assistance Act (CDAA) (LB 650, 2025). Beginning January 1, 2026,
the Community Development Assistance Act (CDAA) is reestablished and replaces the Creating
High Impact Economic Futures (CHIEF) Act. Under the CDAA, business firms and individuals that
contribute to a community betterment organization’s program which is certified for tax credit status
by the Nebraska Department of Economic Development (DED) during a tax year are eligible for the
nonrefundable credit. Applications are approved by DED. The credit for each approved business firm
or individual is limited to 40% of the contribution. Any unused credits may be carried forward to the
next five tax years after the credit was first allowed. The total amount of approved credits is limited to
$350,000 each State fiscal year.
				
Creating High Impact Economic Futures (CHIEF) Act (LB 650, 2025). The tax credits established
under the CHIEF Act will not be allowed for calendar year 2026 or any year thereafter, except the tax
credits allowed for calendar year 2025 that are unused may be carried forward for five years.
				
Food Bank, Food Pantry, Food Rescue Donation Tax Credit (LB 937, 2023; LB 208, 2025; and
LB 650, 2025). For taxable years beginning on or after January 1, 2025, and before January 1, 2026,
any grocery store retailer or restaurant that donates food or any agricultural producer that makes a
qualifying agricultural food donation to a food bank, food pantry, or food rescue during the taxable
year may be eligible for a nonrefundable tax credit. The nonrefundable credit equals the lesser of:
		 	 	
	u 50% of the value of the food donations or qualifying agricultural food donations made during 	
	
the taxable year; or
		 	 	
	u $2,500.
				
If the donation was deducted as a charitable contribution on the taxpayer’s federal return, the donation
must be added back in the determination of Nebraska adjusted gross income or Nebraska taxable income
before the certified credit amount can be claimed. The total amount of approved tax credits is limited
to $500,000 for State fiscal year 2025-2026. Credit requests received on the day the annual limit is
exceeded will be prorated and no additional credit requests will be approved for such fiscal year.
				
Foreign Adversarial Company (LB 644, 2025). A foreign adversarial company is ineligible to receive
any benefits under an incentive program of the State of Nebraska.				
Credits distributed from a foreign adversarial company are also ineligible for tax credit benefits.
				
See DOR’s website for additional information.			
				
Individuals with Intellectual and Developmental Disabilities Support Act (LB 937, 2024).
Beginning with tax year 2025, employers may be eligible for any of three nonrefundable credits. The
three nonrefundable employer credits are:			
1.	 Employers of one or more direct support professionals may apply for a nonrefundable income
tax credit that equals $500 for each direct support professional who:
					
u Is employed by the employer for at least six months during the taxable year; and
					
u Worked at least 500 hours for the employer during the taxable year.
2.	 Employers of one or more individuals receiving services pursuant to a Medicaid home and
community-based services waiver may apply for a nonrefundable income tax credit that equals
$1,000 for each qualified employee who:
	
u Is employed by the employer for at least six months during the taxable year; and
	
u Worked at least 200 hours for the employer during the taxable year.
3.	 Employers that provide any of the following services to one or more individuals pursuant to a
Medicaid home and community-based services waiver during the taxable year may apply for
a nonrefundable income tax credit equal to $1,000 for each eligible individual who received
such services from the employer during the taxable year:
						
u Prevocational;
						
u Supported employment – individual;
						
u Small group vocational support; or
						
u Supported employment – follow along.
				
Employers must first apply to the DOR to receive approval of the credit prior to claiming it on their
income tax return. The total amount of credits that may be approved for all tax credits under this
act (including the refundable credit for direct support professionals) is limited to the statutory limit
established for each State fiscal year.
				
If an employer receiving the credit is a partnership, a limited liability company, an S corporation, or
an estate or trust, the tax credit may be distributed in the same manner and proportion as the partner,
member, shareholder, or beneficiary reports the partnership, limited liability company, S corporation,
estate, or trust income.
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Nebraska Biodiesel Tax Credit Act (LB 208, 2025 and LB 650, 2025). The Nebraska Department
of Revenue (DOR) may approve up to $1 million in tax credits in State fiscal year 2024-25 and each
fiscal year thereafter. Credit requests received on the day the annual limit is exceeded will be prorated
and no additional credit requests will be approved for such fiscal year.	
Nebraska Pregnancy Help Act (LB 937, 2024). Beginning with tax year 2025, individuals and entities
that make cash contributions to eligible charitable organizations (approved PHOs) during the taxable
year may qualify for a nonrefundable tax credit.
Taxpayers must notify the approved PHO of their intent to make a contribution and the amount to be
claimed as a tax credit. The approved PHO notifies DOR of the intended contribution. If tax credits are
available, DOR will notify the approved PHO of the approved credit amount. Provided the contribution
is timely made, the approved PHO should issue a receipt for the contribution made by the taxpayer to
take the nonrefundable tax credit. The nonrefundable tax credit equals the lesser of:
u The total amount of the contributions made to any approved PHO during the tax year and 		
	
approved by DOR; or
u 50% of the income tax liability of the taxpayer for such year.
Any unused credit may be carried forward five years. The credit cannot be carried back. A taxpayer
may only claim a credit on the portion of the contribution not claimed as a charitable contribution on
their federal return.
Married filing separate taxpayers may each claim one-half of the credit.
When the contribution is made by a partnership, limited liability company, or a subchapter S corporation,
the credit must be attributed to each partner, member, or shareholder in the same proportion used to
report the partnership’s, limited liability company’s, or S corporation’s income or loss. Any credit not
used by an estate or trust may be attributed to each beneficiary in the same proportion used to report
the beneficiary’s income from the estate or trust.
Nebraska Shortline Rail Modernization Act (LB 937, 2024 and LB 650, 2025). Beginning with
tax year 2025, the Nebraska Shortline Rail Modernization Act provides a nonrefundable tax credit
against income tax, franchise tax imposed by Neb. Rev. Stat. §§ 77-3801 to 77-3807, and premiums
taxes imposed by Neb. Rev. Stat. §§ 77-907 to 77-918 for qualified maintenance expenditures incurred
by a Class III railroad. The credit is 50% of the qualified shortline railroad maintenance expenditures
incurred during the tax year by the Class III railroad.
Qualified shortline railroad maintenance expenditures do not include expenditures used to generate a
federal tax credit or expenditures funded by a federal grant. The amount of the credit cannot exceed
an amount equal to $1,500 multiplied by the number of miles of railroad track owned or leased in the
state by the applicant at the end of the taxable year. The total amount of tax credits allowed is limited
to $500,000 in each State fiscal year.
To receive the tax credit, the Class III railroad must submit an application to the DOR after incurring
the relevant qualified shortline railroad maintenance expenditures. The application must be submitted
no later than May 1 of the calendar year immediately following the calendar year in which the
expenditures were incurred. DOR will issue a tax credit certificate to the Class III railroad with an
approved application. The Class III railroad will claim the credit by attaching the certification to the
tax return. Any unused credit is carried forward and can be applied against the tax liability for the
next five taxable years immediately following the taxable year in which the credit was first allowed.
The tax credits are transferable to another taxpayer by written agreement. No new applications for tax
credits can be filed after December 31, 2033.
Relocation Incentive Act (LB 1023, 2024 and LB 650, 2025). Beginning with tax year 2025, a
refundable credit is available to employers who pay relocation expenses for a qualified employee. A
qualified employee is an individual who moves to Nebraska for the purpose of accepting a position
of employment and receives an annual salary within the statutory annual wage income range for the
applicable tax year. The credit is equal to the lesser of:
u 50% of the relocation expenses paid during the tax year; or
u $5,000 for each qualified employee.
Employers must first apply to the DOR to receive approval of the credit prior to claiming it on their
income tax return. DOR may approve credits until the total amount of credits approved for the year
reaches $1 million.
The refundable credit may be used to offset income taxes, franchise taxes imposed under Neb. Rev.
Stat. §§ 77-3801 to 77-3807, and premium taxes, including retaliatory taxes under Neb. Rev. Stat. §§
44-150, 77-908, or 81-523.
The credit may be recaptured from the employer if the qualified employee moves out of Nebraska
within two years after the employer claimed the credit. The recaptured amount is an underpayment of
tax and is due and payable on the tax return due immediately following the qualified employee’s loss
of residency.

				
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Important Information for All Filers
Purpose. The instructions in this booklet provide guidance in completing the most common
Nebraska fiduciary income tax forms and schedules. This booklet is intended to be useful to the
greatest number of taxpayers. Nothing in these instructions supersedes, alters, or otherwise changes
any provisions of the Nebraska tax code, regulations, rulings, or court decisions.
We encourage the preparer of any Fiduciary Income Tax Return, Form 1041N, to review applicable
Nebraska law regarding any issue that may have a material effect on this return. Nebraska law and
other useful information may be found at revenue.nebraska.gov.
										Enter All Amounts as Whole Dollars. Do not include cents on the return or schedules. Do not
change the pre-printed zeros in the cents column of the Form 1041N or schedules. Round any
amount from 50 cents to 99 cents to the next higher dollar. Round any amount less than 50 cents
to the next lower dollar.
										Penalties and Interest. Either or both may be imposed under the following conditions:
											u	Failing to file a return and pay the tax due on or before the due date;
											u	Failing to pay the tax due on or before the due date;
											u Failing to file an amended Nebraska income tax return to report changes made to your
federal return;
											u Preparing or filing a fraudulent income tax return; or
											u Understating income on an income tax return.
										 Filing a false or fraudulent Nebraska return is subject to penalty, even if the amounts reported are
taken from your federal return. Unpaid tax is subject to interest at the current statutory rate of 8%
from the original due date to the date the tax is paid. See the DOR Interest Rate Assessed on State
Taxes Revenue Ruling for applicable interest rates.
										Reporting Changes or Corrections. If information on a Nebraska fiduciary income tax return
previously filed is incorrect, a Form 1041N with the “Amended Return” box checked must be
filed. When filing an amended return, remember:
											u	Changes made by the IRS or another state must be reported to DOR within 60 days;
											u	Form 1041N is year-specific. Please be sure to use the correct form for the tax year you
are amending;
											u	You must attach a copy of the related federal or other state amended return, and all related
schedules or other documentation to explain the changes shown on the amended Nebraska
return; and
											u Show only the corrected figures on the amended return.
											u When an amended return reflects a reduction in tax due because Nebraska source income
for its nonresident individual beneficiaries is reduced, the estate or trust will not receive
a refund. Individual beneficiaries may file a claim for refund resulting from the reduced
Nebraska source income.
										Nebraska Extension of Time. A six-month extension of time to file may only be obtained by:
											u Attaching a copy of a timely-filed Application for Automatic Extension of Time to File
Certain Business Income Tax, Information, and Other Returns, Federal Form 7004, to the
Nebraska return when filed;
											u Attaching a schedule to the Nebraska return listing the federal confirmation number and
providing an explanation that the electronic request for automatic federal extension was not
denied; or
											u Filing a Nebraska Application for Extension of Time to File Nebraska Corporation, Fiduciary,
or Partnership Return, Form 7004N, on or before the due date of the return, when you need
to make a tentative Nebraska payment or when a federal extension is not being requested.
Failing to attach the applicable extension document may result in a late filing penalty. An extension
of time only extends the date to file the return. It does not extend the due date to pay the tax. Any
tax not paid by the original due date is subject to interest.
No additional extension of time to file the Form 1041N will be provided.
Accounting Methods. The accounting method used for federal income tax purposes must be used
for Nebraska income tax purposes. A taxpayer may not change the accounting method used to
report income in prior years unless the change is approved by the IRS. A copy of this approval
must accompany the first return that shows the change in the method of accounting.
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Federal Return. A copy of the federal return and supporting schedules, as filed with the IRS,
must be attached to this return. If there are more than 50 Federal Schedules K-1, please submit
them and any supporting schedules on CD-R media or a flash drive, rather than on paper. The
preferred format for the Federal Schedules K-1 and supporting schedules is PDF. However, a
Microsoft Word or Excel electronic document is also acceptable.
Estimated Tax Payments. Nebraska does not require an estate or trust to make estimated tax
payments. Any estate or trust making a voluntary estimated payment should use the Nebraska
Fiduciary Estimated Income Tax Payment Voucher, Form 1041N-ES. Report the estimated tax
payment on line 27.

			

Notification of Scam Text Messages
The Nebraska Department of Revenue (DOR) has been notified of scam text messages being sent
asking individuals to click a link to receive their refund. While the cited Nebraska Revised Statute
adds validity to the message, the embedded link will direct the taxpayer to a bogus site to enter
their personal and/or banking information.
			
This scam has been reported in other parts of the country.
			
The DOR will never send a text to ask for personal tax return information.
			
If you receive a text message of this kind, DO NOT REPLY and please delete it.
			
If you have questions on the status of your State of Nebraska tax refund, please go to: https://
revenue.nebraska.gov/individuals/refund-information
			
As scammers develop more sophisticated schemes, staying informed is your best defense. The
Nebraska Attorney General’s Office offers free resources to help consumers recognize and avoid
scams.
			
Visit ProtectTheGoodLife.Nebraska.gov.
						
Nonresident 				Estates and trusts must remit Nebraska income tax withholding for each nonresident individual
beneficiary who does not complete a Nebraska Nonresident Income Tax Agreement, Form 12N. For
Beneficiaries
the purposes of Form 12N and the income tax withholding requirements, an individual includes
a nonresident grantor of a grantor trust.
										 Nonresident beneficiaries who sign the Form 12N agree to file a Nebraska income tax return and
pay all taxes due directly to DOR. This relieves the estate or trust from the obligation to remit
income tax withholding on the beneficiary’s behalf. All signed and completed Forms 12N must
be attached to the Form 1041N.
If a Form 12N is not signed and completed for a nonresident individual beneficiary, the amount
to be paid is 5.20% of the nonresident beneficiary’s share of estate or trust taxable income from
Nebraska sources.
The estate or trust reports the amount of income tax remitted on behalf of each nonresident
beneficiary on the Nebraska Beneficiary's Share of Nebraska Income, Deductions, Modifications,
and Credits – Schedule K-1N. Attach each Nebraska Schedule K-1N to the fiduciary return. Do not
remit income tax for corporations, estates, or trusts (except grantor trusts) that are beneficiaries.
Nebraska law does not allow payment of income tax by an estate or trust on behalf of these entities.
Instead, these entities are required to file a Nebraska return.
A nonresident individual beneficiary may claim the amount of income tax remitted by the estate or
trust as a credit against his or her Nebraska income tax liability by attaching a copy of the Nebraska
Schedule K-1N to the Nebraska Individual Income Tax Return, Form 1040N.
Nonresident individual beneficiaries do not have to file a Nebraska individual income tax
return if:
	 	 	 	 	 	 	 	 	 	 	 u	Their only connection with the state is conducting the business activities of the estate or
trust; and
	 	 	 	 	 	 	 	 	 	 	 u	The estate or trust has remitted income tax with respect to all the Nebraska income attributable
to the nonresident’s share of the estate’s or trust’s income.
In lieu of filing a Nebraska Individual Income Tax Return, a nonresident beneficiary may elect
to allow the full amount of income tax withholding to be retained by the state. Any nonresident
may still file a Form 1040N, however, and claim a refund if one is due.
Nonresident Beneficiary – No Income Tax Withholding Requirement. The estate or trust is
not required to remit income tax for any nonresident individual beneficiary who completes and
submits a Form 12N to the estate or trust, before the original filing of the Form 1041N. For
purposes of the Form 12N, an individual includes a nonresident grantor of a grantor trust. A
completed Form 12N must:
			

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											u	Include all the requested information; and
											u	Be signed and dated by the beneficiary or the beneficiary’s authorized representative (attach
a copy of Power of Attorney, Form 33).
Any nonresident beneficiary who files Form 12N to avoid income tax withholding must file
a Form 1040N. Failing to file the required Form 1040N may result in:
											u	An assessment issued to the nonresident individual beneficiary based on the information
available to DOR; or
											u	The loss, by the nonresident individual beneficiary, of any current year Nebraska net operating
or capital loss distributed from the estate or trust. A Nebraska net operating or capital loss
carryforward will not be allowed to offset Nebraska income until the Nebraska return for
the loss year has been filed.
Beneficiary’s Return. A resident beneficiary must include his or her entire share of the estate or
trust income in Nebraska adjusted gross income. Income should be computed under the applicable
provisions of the Internal Revenue Code (IRC). Nonresident beneficiaries are subject to the Nebraska
income tax on their share of the estate or trust income derived from sources within Nebraska.
Reporting Nebraska Source Income to Beneficiaries. An estate or trust must provide all
beneficiaries with a Nebraska Schedule K-1N. See the Nebraska Schedule K-1N instructions for
additional information.
The income, loss, and deduction amounts reported on the Nebraska Schedule K-1N must be
calculated in the same manner as income is distributed.
Accumulation Distribution. If the accumulation distribution is included in the beneficiary’s
federal adjusted gross income, it should be included in the beneficiary’s Nebraska taxable income.

Credits
Distributable to
Beneficiaries

Community Development Assistance Act (CDAA) Credit. A fiduciary for an estate which operates
a business is allowed a credit for a contribution made to approved projects of community betterment
organizations recognized by the Nebraska Department of Economic Development (DED). Attach
the 2025 Nebraska Community Development Assistance Act Credit Computation, Form CDN, to
the Form 1041N. The estate or trust does not need to attach a copy of the Form 1099NTC. DOR
will receive the Form 1099NTC information directly from DED.
More detailed information on this credit can be obtained by contacting:
Nebraska Department of Economic Development
245 Fallbrook Blvd, Suite 002
Lincoln, NE 68521-4666
https://opportunity.nebraska.gov/programs/community/cdaa/
Beginning Farmer Credit. This credit is available to owners of agricultural assets, when the
agricultural assets are rented to qualifying beginning farmers or livestock producers. Each beneficiary
eligible for the credit will receive a copy of the Statement of Nebraska Tax Credit, Form 1099BFC,
from the Nebraska Department of Agriculture (NDA). Each beneficiary is allowed a share of the
credit calculated by using the same method used to report income received from the estate or trust.
The Form 1099 BFC does not need to be filed with the beneficiary’s individual income tax return.
Estates or trusts do not need to attach a copy of the Form 1099 BFC. DOR will receive the Form
1099 BFC information directly from the NDA.
For more details regarding this credit, contact:
Nebraska Department of Agriculture
PO Box 94947
Lincoln, Nebraska 68509-4947
402-471-4876
nextgen.nebraska.gov
Financial Institution Tax Credit. An estate or trust may take a nonrefundable credit against its
income tax liability for the Nebraska financial institution tax. The credit is limited to the estate
or trust’s share of the Nebraska financial institution tax paid by a financial institution electing to
be taxed under the IRC as an S corporation. This credit is claimed on line 13 of Form 1041N.
The amount of financial institution tax credit taken by the estate or trust is an adjustment increasing
federal taxable income. The amount of this credit claimed on line 13, Form 1041N, is included in
the amounts reported on line 4, Form 1041N, and on line 7 of Nebraska Schedule I, Form 1041N.
Form 3800N Credits. Nebraska provides several tax incentive credits that may be earned by
entities conducting business in this state.

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Use Tax		

An estate or trust must file tax incentive credit distribution forms including Forms 775N and 312N
before credits can be allowed to a beneficiary. Attach a distribution schedule for Form 775N,
Schedule II or for Form 312N, Schedule II (that lists each beneficiary, the beneficiary’s tax ID
number, the income percentage, and each beneficiary's distributed credits). The total amount
distributed by the estate or trust must be distributed in the same proportion as ordinary income.
					An estate or trust may be subject to use tax. An estate or trust owes use tax when the proper sales
tax has not been paid on purchases delivered into Nebraska. This often occurs when purchases are
made from out-of-state, mail order, or Internet sellers. Use tax is also due when items purchased
for resale are withdrawn from inventory for business or personal use.
Example 1.
The estate or trust purchased a computer from a seller in South Dakota over the Internet for
$1,570 plus $30 shipping and handling charges. Both charges are taxable. The computer is
shipped to the estate or trust in Scottsbluff, Nebraska and no tax is charged or collected by
the seller. The state tax is $88 ($1,600 X 5.5%) and the local tax is $24 ($1,600 X 1.5%).
The total use tax owed is $112 ($88 + $24 = $112).
Example 2.
A repair shop in Scottsbluff, Nebraska provides motor vehicle repair service. The repair shop
also owns a tow truck used for towing customer motor vehicles needing repair. The shop
purchases oil and oil filters, tax exempt, for resale using the Nebraska Resale or Exempt Sale
Certificate, Form 13. When oil and oil filters are removed from sales tax exempt inventory
and used to change the oil in the business-owned tow truck, state and local use tax is due
on the cost of the oil and oil filters.
For additional information, see the Nebraska Use Tax Information Guide.

Purpose of Form 		 The Nebraska Fiduciary Income Tax Return, Form 1041N is not simply an informational return.

The Form 1041N and schedules are necessary to:
	 u	Calculate and pay income tax on income retained by the estate or trust;
									u	Calculate the income, deductions, and credits that will be passed through to the beneficiaries; and
	 u	Calculate and pay income tax on behalf of nonresident individual beneficiaries.

Who Must File?
The Form 1041N must be filed by the fiduciary of every resident estate or trust that is required to
file a federal income tax return, except for trusts that meet all of the following conditions:
	 u	The trust is classified as a simple trust;
	 u	All of the trust’s beneficiaries are residents of Nebraska;
	 u	All of the trust’s income is derived from Nebraska sources;
	 u	The trust has no federal tax liability; and
	 u	The trust is not an electing small business trust.
The Nebraska Fiduciary Income Tax Return, Form 1041N, must also be filed by the fiduciary of
a nonresident estate or trust if: the estate or trust is required to file a federal income tax return for
the taxable year; and the estate or trust had income derived from Nebraska sources. The fiduciary
is responsible for filing the return for the estate or trust, whether the income is taxable to the estate
or trust, or to the beneficiaries.
Electing Small Business Trust (ESBT). An ESBT which reports and pays federal income tax
pursuant to IRC § 641(c) on income from an S corporation doing business in Nebraska, must report
and pay Nebraska income tax on the income. See line 10 instructions for further information.
Bankruptcy Estate for an Individual. The bankruptcy trustee or debtor in possession must file
Form 1041N for the estate of an individual involved in bankruptcy proceedings under Chapter 7 or
11 of Title 11 of the United States Code where a fiduciary income tax return is required under the
provisions of the IRC. Calculate the income tax for the bankruptcy estate on Form 1040N using the
tax rate schedule for married, filing separately filing status, and subtract one personal exemption
credit. Enter the tax on line 35 of the Form 1040N and on line 8 of Form 1041N. Complete the
remaining lines of Form 1041N. Attach Form 1040N to Form 1041N. In a jointly‑administered
case, if two separate federal tax returns are required, then two separate Nebraska tax returns must
be filed.
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Bankruptcy Estate for Corporations and Partnerships. Unlike the situation for an individual
in bankruptcy, commencing bankruptcy proceedings for a corporation or partnership does not
create a separate taxable entity. Therefore, there is no federal filing requirement for the bankruptcy
trustee, and no Nebraska filing requirement.
Exempt Trusts. A trust, which by reason of its purposes and activities is exempt from federal
income tax, is also exempt from Nebraska income tax. However, exempt trusts filing an Exempt
Organization Business Income Tax Return, Federal Form 990-T, to report unrelated business
income must file a Nebraska return and pay tax to Nebraska. If the federal tax was computed at
the corporate rates, the fiduciary must file a Form 1120N. If the federal tax was computed at the
fiduciary rates, the fiduciary must file a Form 1041N.

When and Where to File?
This return must be filed on or before the 15th day of the fourth month following the close of the
taxable year. If this return is being filed by an exempt organization which has unrelated business
income, the due date is the 15th day of the fifth month following the close of the taxable year of
the exempt organization. The DOR provides the option to e-file utilizing the modernized e-file
(MeF) program. DOR encourages all estates and trusts to e-file their Nebraska Fiduciary Income
Tax Return, Form 1041N, using the MeF program. This program also allows an estate or trust to
schedule payments when the Form 1041N is filed. For more information go to revenue.nebraska.gov.
Paper filers, mail the Form 1041N to:
	 Nebraska Department of Revenue
	 PO Box 94818
	 Lincoln, Nebraska 68509-4818

How to Complete Form 1041N
Tax Period. A 2025 Form 1041N must be used to file for the calendar year 2025, or a fiscal year
beginning in 2025. Space is provided at the top of the return to enter the beginning and ending
dates for short-period or fiscal-year filers. The taxable year for Nebraska must be the same as the
taxable year used for the federal income tax return.
If the estate or trust changes its federal taxable year, it must also change its Nebraska taxable
year. A copy of the approval from the IRS to change accounting periods must accompany the first
return that shows the change.
Nebraska ID Number. Enter the Nebraska ID number assigned to the estate or trust by DOR. If
the estate or trust has not been assigned a Nebraska ID number, leave this field blank. A Nebraska
ID number will be assigned when the return is received. DOR will mail notification of the assigned
Nebraska ID number to the address shown on the return.
Federal ID Number. Enter the federal ID number assigned to the estate or trust by the IRS.
Residence of Estates and Trusts. The residence of an estate or trust is the same as either the
domicile of the deceased at the time of death; or the domicile of the creator of the trust at the time
the trust, or a portion of the trust, became irrevocable. The residence of a trust is not changed if
the creator changes domicile or if the property in the trust changes location. The residence of the
trustee or personal representative does not affect the residence of the estate or trust.
Grantor Type Trust. If all income, deductions, and credits are reported by the grantor, his or her
spouse, or other person under IRC §§ 671-678, and this person is not the trustee, lines 1 through
36 of the Form 1041N need not be completed. A copy of the federal return need not be attached.
Write “Schedule Attached” on line 1, and attach a separate statement showing the items of income,
deduction, and credit. The name, address, and identifying number of the grantor, spouse, or other
person to whom the income is taxed must be included in the separate statement.
If the fiduciary is not required to file a federal return, do not file a Form 1041N.
Final Return. Check the “Final Return” box at the top of the return if the estate or trust ceased
to exist during the 2025 tax year.
Distributed Form 3800N Credit. Check the “Distributed Form 3800N Credit” box if the fiduciary
is distributing Form 3800N tax credits in this tax year. Include a distribution schedule in addition
to recording the amount of the distributed credit on the Schedule K-1N.

Line 1		 						Total Federal Income. Enter the total federal income as shown on the federal return (Federal
Form 1041, 1041‑QFT, or 1041-N).

Line 2 		 	 	 	 	 	 Federal Taxable Income. Enter the federal taxable income as shown on the federal return.
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Line 3 		 	 	 	 	 	 Undistributed Income from U.S. Government Bonds or Other U.S. Obligations. Enter the

amount of interest and dividend income from U.S. government obligations exempt from state
taxation. The Taxability of Interest and Dividend Income From State, Local, and U.S. Government
Obligations Information Guide lists U.S. interest and dividend income that can be included on
line 3. Interest income from repurchase agreements involving U.S. government obligations is not
deductible as U.S. government interest.
										 Gains or losses from the sale or other disposition of federal securities are taxable for state income
tax purposes and should not be included on line 3.

Line 4 	 	 	 	 	 	 	 Undistributed Income from Non-Nebraska State and Local Interest and Other Nebraska

Adjustments Increasing Federal Taxable Income. Enter the total adjustments increasing federal
taxable income that were not distributed to the beneficiaries. These adjustments include, but are
not limited to:
	 u	Non-Nebraska state or local obligations exempt from federal taxation;
	 u	Any loss from an S corporation or LLC which was not from Nebraska sources;
	 u	Federal net operating or capital losses deducted in computing federal taxable income; and
	 u	Nebraska state and local income, sales and use taxes deducted under section 164 of the IRC.
u	Any food donation that was deducted as a charitable contribution on the taxpayer's federal
return and that was also used to calculate the Nebraska Food Bank, Food Pantry, Food
Rescue Donation Tax Credit on the Nebraska return must be added back as increase to the
federal taxable income.

Line 5 	 						Special Capital Gains/Extraordinary Dividend Deduction. See the Special Capital Gains/
Extraordinary Dividend Election and Computation, Form 4797N, instructions.

Line 6 							Nebraska Adjustments Decreasing Federal Taxable Income. Enter the total adjustments

decreasing federal taxable income, except those already deducted above. These deductions include,
but are not limited to:
											u	Income from an S corporation or LLC which was not from Nebraska sources. This deduction
is limited to the amount included in federal taxable income. An estate or trust cannot include
in this deduction any amount of S corporation or LLC income from non-Nebraska sources
that was part of the qualified business income deduction under IRC § 199A claimed on its
federal return;
	 u	Any Nebraska net operating or capital loss; and
											u	Any amount included in federal taxable income, but not in federal distributable net income
by a nonresident estate or trust [for example, gains on capital assets that are allocated to the
corpus of the estate or trust and are not – (A) paid or credited, or required to be distributed
to any beneficiary during the taxable year, or (B) paid or permanently set aside to be used
for the purposes specified in section 642(c)]. The nonresident estate or trust must attach
Schedule B, Federal Form 1041, to its Nebraska Form 1041N and include an explanation
of the deduction.
										 Nebraska resident estates and trusts cannot deduct income earned or derived from outside Nebraska,
except for non-Nebraska S corporation or LLC income. Instead, the resident estate or trust may
be entitled to a credit for income tax paid to another state. See the instructions for Credit for Tax
Paid to Another State for Resident Estate or Trust Only, Nebraska Schedule III.
Note: Federal and state income taxes paid or refunded cannot be deducted as an adjustment
decreasing federal taxable income for state purposes.

Line 7 	 						Nebraska Taxable Income. Enter the result of line 2 plus line 4 minus lines 3, 5, and 6.
Line 8 	 	 	 	 	 	 	 Nebraska Income Tax. Resident estates and trusts compute their tax using the tax schedule below,

and enter the result on line 8.
Nonresident estates and trusts do not make an entry on line 8. Instead, nonresident estates and
trusts use the tax rate schedule to complete line 2 of Nebraska Schedule I.

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2025 Nebraska Tax Rate Schedule
for Fiduciary Income Tax Return
If taxable income is:		
The Nebraska tax is:
over —	 	 but not over
$	
0	 $	
660	
2.46%	 of the income
	
660		
6,290	
$ 16.24 +	 3.51% of the excess over $660
	
6,290		 20,300	
$213.85 + 	5.01% of the excess over $6,290
	 20,300		
—	
$915.75 +	 5.20% of the excess over $20,300

Line 9		 	 	 	 	 	 	 Nebraska Other Tax. The Nebraska other tax is calculated by multiplying the federal tax on

lump-sum distributions of pensions by 29.6%. Resident estates and trusts use the worksheet below
to compute their line 9 entry.
Nebraska Other Tax Worksheet
(Use to compute line 9, Form 1041N. Keep for your records.)
	 1.	 Tax on lump-sum distributions of pensions
		 (enter amount from Federal Form 4972)........................... _________________
	 2.	 Other tax rate.....................................................................	
x  .2960
	3.	Total other tax (Line 1 multiplied by .2960)..................... _________________
Resident estates and trusts, enter this total on line 9, Form 1041N.
Nonresident estates and trusts, enter this total on line 3, on the Nebraska Schedule I.
Attach a copy of your Federal Form 4972 and/or
recomputed Federal Form 1041, Schedule I, to your return.

Line 10							ESBT. An ESBT must compute Nebraska income tax on income received from S corporations

doing business in Nebraska which is taxed federally under IRC § 641(C). Under federal law, an
ESBT is required to calculate its tax liability as a separate trust. Nebraska also requires an ESBT
to calculate its Nebraska tax liability as a separate trust. An estate or trust with ESBT income
must complete the Electing Small Business Trust Tax Calculation Worksheet, Form 1041N, to
calculate the Nebraska tax liability on its ESBT income. In completing the worksheet, the ESBT
adjusts its federal taxable income in the same manner as an estate or trust which is not an ESBT.
This includes, but is not limited to, an adjustment to federal taxable income for non-Nebraska S
corporation income or loss. In addition, a nonresident ESBT will compute its Nebraska source
income and tax liability on the ESBT income in the same manner as a nonresident estate or trust
which is not an ESBT.
The tax computed on the ESBT income is based on the Nebraska tax rate schedule found in the
line 8 instructions.

Line 11 		 	 	 	 	 	 Total Nebraska Tax. Resident estates and trusts enter the total of lines 8 , 9, and 10. Nonresident
estates and trusts enter the amount from line 11 of Nebraska Schedule I.

Line 12 	 	 					Credit for Tax Paid by Resident Estate or Trust to Other States. Enter the amount from line 5

of Nebraska Schedule III. Attach a copy of the income tax return filed with the other state. If the
estate or trust is claiming credit for income tax paid to a political subdivision of another state
in which no annual income tax return is required, then attach a Federal Form W-2 statement to
support the claimed credit.
										 Prepare a separate Nebraska Schedule III for each state to which you paid income tax. However,
if some income is subject to income tax in both another state and a city within that state, complete
only one Nebraska Schedule III and combine the city and state taxes paid.

Line 13	

	
	
	
	
	
	

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Community Development Assistance Act (CDAA) Credit. The Nebraska CDAA credit is allowable
for contributions to approved projects of community betterment organizations recognized by the
Nebraska Department of Economic Development (DED). Attach the 2025 Nebraska Community
Development Assistance Act Credit Computation, Form CDN, to the Form 1041N. Do not attach a
copy of the Form 1099NTC. DOR will receive the Form 1099NTC information directly from DED.
For more details regarding this credit, contact:
Nebraska Department of Economic Development
245 Fallbrook Blvd, Suite 002
Lincoln, Nebraska 68521-4666
https://opportunity.nebraska.gov/programs/community/cdaa/
Financial Institution Tax Credit. Enter the amount of the tax credit available to you from the
2025 Statement of Nebraska Financial Institution Tax Credit, Form NFC, supplied by the financial
institution in which you are a shareholder.
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Line 14		 					Form 3800N Nonrefundable Credit. Enter any nonrefundable tax credits reported on the
Nebraska Incentives Credit Computation, Form 3800N. Attach a copy of the Form 3800N and
any supporting schedules.

Line 15 							Employer’s Credit for Expenses Incurred for TANF (ADC) Recipients. Enter the portion of
the credit from line 2, Form TANF, that is not distributed to beneficiaries.

Line 16	 						Nebraska Employer Tax Credit for Employing Convicted Felons. Enter the certified credit
amount and the certificate number from the Nebraska Employer Tax Credit Application for
Employing Convicted Felons, Form ETC-A. The employer must file an application with DOR and
be approved to receive the tax credit prior to claiming the credit. If approved for more than one
certificate number, you must attach a schedule listing each certificate number and the approved
amounts.

Line 17	 						School Readiness Tax Credit for providers. The credit may only be claimed after the application

has been approved in writing by DOR. For entities retaining the tax credit, enter the certificate
number and the credit amount from your approved Form SR-3604. The approved credit may be
distributed by completing the Form 1041N, Schedule K-1N for each beneficiary with the certificate
number and amount of the distributed credit. If the tax credit was received by a distributing entity,
enter the certificate number and credit amount from the Schedule K-1N. Attach the Schedule K-1N
from the distributing entity. For more information about this credit, go to School Readiness Tax
Credit Act.

Line 18	 						Child Care Tax Credit for contributors. Enter the approved child care tax credit amount and

certificate number from Form CCTC-A. A trust or estate may only claim a credit on the portion
of the contribution that was not deducted as a charitable contribution on its federal return. The
taxpayer may carry forward the excess credit for up to five taxable years after the taxable year in
which the credit was first allowed. Taxpayers must use the carryover credit in the earliest taxable
year possible.

Line 19	 						Opportunity Scholarships Act credit for contributors. Enter the carryforward credit not used

on the 2024 Form 1041N. The granting of the tax credit for the contributions was limited to 2024
tax year. The unused tax credits granted in 2024 may be carried forward five years from the year
granted.Taxpayers must use the carryover credit in the earliest taxable year possible.

Line 20	 						Creating High Impact Economic Futures (CHIEF) credit. This nonrefundable credit is allowable
for contributions to community betterment organization programs or projects certified for tax credit
status by the Nebraska Department of Economic Development. The credit must be claimed on the
tax return for the year in which the contribution was made. The granting of the tax credit for the
contributions was limited to 2025 tax year. The unused tax credits granted in 2025 may be carried
forward five years from the year granted. Attach Form 1879NTC.

Line 21	 						Pregnancy Help Act Credit for contributors. Enter the lesser of the amount of contributions
made to an approved Pregnancy Help Organization and verified by DOR or 50% of the income
tax liability (line 11, Form 1041N). Any unused credit may be carried forward for the next five
years after the credit was first allowed. The tax credit cannot be carried back. A taxpayer may only
claim a credit on the portion of the contribution that was not claimed as a charitable contribution
on their federal return.

Line 22	 						Total Nonrefundable Credits. Add lines 12 through 21.
Line 23	 						Nebraska Tax After Nonrefundable Credits. Subtract line 22 from line 11 and enter the result
on line 23. If line 22 is more than line 11, enter zero (-0-).

Line 24 							Nebraska Income Tax Withholding for Nonresident Individual Beneficiaries. Enter the total
amount of income tax withholding from column (G) of Nebraska Schedule II.

Line 25 		 	 	 	 	 	 Total Nebraska Income Tax Liability. Enter the result of line 23 plus line 24.
Line 26		 					Form 3800N Refundable Credit. Enter the total refundable tax credits reported on Form 3800N.
Attach a copy of the Form 3800N and any supporting schedules.

Line 27	 						 Tax Deposited with Form 7004N and 2025 Estimated Income Tax Payments. Add the total

amount paid in estimated tax payments and any amount paid with the Nebraska extension request,
Form 7004N. Enter the total on line 27.

Line 28		 					 Beginning Farmer Credit. Enter the Beginning Farmer credit reported on a Statement of Nebraska
Tax Credit, Form 1099BFC.

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Line 29 						Credit for Community College Property Taxes. Enter the amount from line 1, Form PTC and
attach Form PTC.

Line 30 						PTET credit. If you are not distributing the PTET credits received from an electing partnership

or S corporation in which you hold an ownership interest, enter the total amount of PTET credit
received from electing partnerships on line 30 and complete lines 30a, 30b, 30c, and 30d; and
attach the Schedules K-1N. If PTET credits were received from more than one partnership or S
corporation attach a schedule in the same format as lines 30a, 30b, 30c, and 30d. If the PTET
credits received from partnerships or S corporations will be distributed to your beneficiaries do
not include that amount on line 30, instead include that amount on line 30d, on the beneficiaries
Schedule K-1N, and add the distributed credit to the Schedule PTET.

Line 31	 						Other Credits. Enter Nebraska income tax withheld on salary or wage payments included in the
income of the estate. Enter any Nebraska income tax withheld shown on Federal Forms 1099-R
or W-2G if the related income is included in the income of the estate or trust. Attach a copy of
Federal Forms W-2, 1099-R, or W-2G to support the amount claimed.

Line 32	 						Total Payments. Enter the total of lines 26 through 31.
Line 33	 						Tax Due. If line 25 is greater than line 32, subtract line 32 from line 25 and enter the result on
line 33.

Electronic Payment Options

										

Electronic Funds Withdrawal (EFW). With this payment option, you provide your payment
information within your electronically-filed return. Your payment will automatically be
withdrawn from your bank account on the date you specify.
Nebraska e-pay. Nebraska e-pay is DOR’s web-based electronic payment system. You
enter your payment and bank account information, and choose a date (up to a year in
advance) to have your account debited. You will receive an email confirmation for each
payment scheduled.
ACH Credit. You (or your bank) create an electronic file in the appropriate ACH file
format. It is submitted to the Federal Reserve and instructs your bank to “credit” the state’s
bank account.
Nebraska Tele-pay. Nebraska Tele-pay is DOR’s phone-based electronic payment system.
Call 800-232-0057, enter your payment and bank account information, and choose a date
(up to a year in advance) to have your account debited. You will receive a confirmation
number at the end of your call.
Cancel a Payment. You may cancel a payment scheduled through Nebraska e-pay by logging
into the e-pay program from our website and selecting “cancel payment.”
Check or Money Order. If you are not using one of the electronic payment options described
above, include a check or money order payable to the “Nebraska Department of Revenue.” Checks
written to DOR may be presented for payment electronically.
At this time, DOR does not offer a credit card payment option for fiduciary income tax returns.

Line 34	 						 Overpayment. If line 32 is greater than line 25, enter the result of line 32 minus line 25.
Note: An estate or trust filing an amended return will not receive a refund of any amount withheld
on its original return for nonresident beneficiaries when the Nebraska source income for its
nonresident individual beneficiaries is reduced. Instead, the beneficiaries may file a claim for an
income tax refund resulting from the reduced Nebraska source income.

Line 35	 						Amount Credited to 2026 Estimated Tax. Enter the amount of overpayment shown on line 34
that you want credited as a tax year 2026 estimated payment for the estate or trust.

Line 36	 						Overpayment to be Refunded. Enter the amount of overpayment shown on line 34 that you want
refunded. The overpayment to be refunded is calculated by subtracting line 35 from line 34.

Line 37	 						 Paper filed returns with refunds cannot be processed as direct deposits and will be mailed. Do not
enter banking information if filing the Form 1041N by paper.

										 For electronically filed fiduciary returns, complete the information on line 37 to deposit the refund
directly into the estate's or trust's checking or savings account. Enter the routing number and account
number found on the bottom of the checks used with the account. The routing number is listed
first and must be nine digits. The account number is listed to the right of the routing number and
can be up to 17 digits. Enter these numbers in the boxes found on lines 37a and 37c, and complete
line 37b, Type of Account.
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The box on line 37d must be checked if the refund will go to a bank outside the United States.
This is necessary to comply with banking rules regarding International ACH Transactions (IATs).
These refunds cannot be processed as direct deposits and instead will be mailed.

Signature

Sign and Date the Tax Return. This return must be signed by the fiduciary or officer of the
organization receiving, having custody of, or controlling and managing the income of the estate
or trust. Include a daytime phone number and an email address in case DOR needs to contact you
about your account.
Email. By entering an email address, the taxpayer acknowledges that DOR may contact the
taxpayer by email. The taxpayer accepts any risk to confidentiality associated with this method
of communication. DOR will send all confidential information by secure email or the State of
Nebraska’s file share system. If you do not wish to be contacted by email, write “Opt Out” on the
line labeled “email address.”
If the fiduciary authorizes another person to sign this return, there must be a Power of Attorney,
Form 33, on file with DOR, or attached to the return.
The act of e-filing a return is your signature. By e-filing the return, taxpayers and their tax preparers,
if applicable, are declaring under penalties of perjury, that they have examined the electronic return,
and to the best of their knowledge and belief, it is true, correct, and complete.
Paid Preparer’s Use Only. Any person who is paid for preparing a taxpayer’s return must sign
the return as preparer. Additionally, the preparer must enter their Preparer Tax ID Number (PTIN),
their firm's name, and Federal Employer ID Number (EIN).

Nebraska Schedule I Instructions

Computation of Nebraska Tax for Nonresident Estate or Trust
Purpose. The Nebraska Schedule I is used by nonresident estates and trusts to determine the
Nebraska tax (Form 1041N, line 11, Total Nebraska Tax) on income derived from or connected
with Nebraska sources. To complete this schedule, tax is computed on federal taxable income as
modified by specific Nebraska adjustments. The Nebraska tax liability of the nonresident estate
or trust is determined by multiplying the tax computed on line 4 by a ratio of Nebraska source
income divided by total federal income, as modified by specific Nebraska adjustments and adding
any tax computed on income from an ESBT.

Line 1

Nebraska Taxable Income. Enter the amount from Form 1041N, line 7.

Line 2

Nebraska	 Income	 Tax	 on	 Line	 1	 Amount.	 Nonresident estates and trusts compute their
income tax using the tax rate schedule shown for line 8 on page 11 of the instructions, and
entering the result on line 2.

Line 3

Nebraska	Other	Tax.	The Nebraska other tax is calculated by multiplying the federal tax on
lump-sum distributions of pensions by 29.6%. Nonresident estates and trusts use the worksheet
included as part of the Form 1041N, line 9 instructions to compute their line 3 entry.

Line 4

Total Nebraska Tax. Add lines 2 and 3, and enter the result on line 4.

Line 5

Income Derived from Nebraska Sources, Except Capital and Ordinary Gain (Loss). Enter
the total amount of taxable income derived from Nebraska sources. Include the Nebraska portion
of taxable income reported on lines 1, 2a, 3, 5, 6, and 8 of the U.S. Income Tax Return for Estates
and Trusts, Form 1041. Attach a schedule listing the income amounts.
If there was business activity in more than one state, and any of this activity had income from
Nebraska sources, only a portion of the fiduciary’s income is included on line 5. The portion
included will be based on the same ratio that income from Nebraska sources bears to total income
for that business activity. A separate calculation is required for each separate business activity.
Attach a copy of any Nebraska Schedule K-1N, reporting Nebraska source income distributed to
the fiduciary by a partnership, LLC, or S corporation.

Line 6		

Nebraska Capital and Ordinary Gain (Loss). Enter the taxable amount of Nebraska capital
and ordinary gain or loss reported on lines 4 and 7 of Federal Form 1041. Also attach a schedule
identifying each asset sold and the amount of Nebraska gain or loss received from the sale. The
reportable gains (losses) may include those from the sale of the following properties located in
Nebraska: real property; trade or business property; depreciable and amortizable property; oil,
gas, geothermal, or other mineral properties; IRC § 126 property; and tangible personal property
located in Nebraska at the time of sale.

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Line 7 	 	 	 	 	 	 	 Adjustments, if any, Applied to Nebraska Income. The adjustments must relate to the Nebraska

income amounts reported on lines 3 and 4. Include Nebraska state and local income, sales and
use taxes deducted under section 164 of the IRC. Include a schedule specifically identifying
the adjustments claimed. These adjustments do not include any expenses that are deductible
in computing the fiduciary's federal taxable income (e.g., charitable contributions, taxes, and
fiduciary fees).

Line 8 	 	 	 	 	 	 	 Nebraska Adjusted Gross Income. Enter the result of line 5 plus or minus lines 6 and 7.
Line 9 	 	 	 	 	 	 	 Nebraska Share of Line 4. Use the mathematical formula provided on line 9 of Nebraska
Schedule I to calculate the Nebraska tax. Enter the result on line 9.

Line 10 							Electing Small Business Trust (ESBT). Enter the amount from line 18 of the ESBT worksheet,
if applicable.

Line 11 							Total Nebraska Tax. Enter the sum of lines 9 and 10 on line 11 and on line 11, Form 1041N.

Nebraska Schedule II Instructions

Nonresident Beneficiary’s Share of Nebraska Income, Deductions, and  Credits
Purpose. The Schedule II is completed to identify the nonresident beneficiaries and to calculate
income tax withholding for the nonresident individual beneficiaries. The income tax withholding
is calculated on the distributable net income from Nebraska sources. No income tax withholding is
remitted when the nonresident individual beneficiary has completed a 2025 Nebraska Nonresident
Income Tax Agreement, Form 12N. This schedule must be completed, unless:
											u	All the beneficiaries are residents of Nebraska; or
											u	The Form 1041N is filed for a simple trust with nonresident beneficiaries and the trust only
received portfolio income. Generally, portfolio income includes all gross income (other than
income derived in the ordinary course of a trade or business) that is attributable to interest,
dividends, and royalties. These simple trusts must check the box under the Schedule II heading.
	 	 	 	 	 	 	 	 	 	 Name and Address. Enter the name and address for each nonresident beneficiary. If additional
space is needed, attach a schedule using the same format as Nebraska Schedule II.
										Column (A). Enter the Social Security number or Nebraska ID number for each nonresident
individual beneficiary.
										Column (B). Enter the nonresident individual beneficiary’s share of the distributable net income
which was derived from or attributable to Nebraska sources. Include only current earnings
distributions, not accumulation distributions. Portfolio income (see above) is not included in
Nebraska income.
										Column (C). Enter the nonresident individual beneficiary’s share of the deductions related to the
income included in column (B).
										Column (D). Place a check mark in this column if a properly completed and signed Form 12N is
attached. Do not complete columns (E) and (G) if this box is checked.
	 	 	 	 	 	 	 	 	 	 Column (E). Enter the nonresident individual beneficiary’s share of Nebraska source income
subject to withholding. Subtract the amount in column (C) from the amount in column (B), and
enter the difference or zero (-0-), whichever is greater.
										Column (G). Multiply the amount in column (E) by .0520 and enter the result in column (G). This
is the amount of Nebraska income tax withholding for each nonresident individual beneficiary who
did not complete a Form 12N. Report the amount of income tax withholding for each nonresident
individual beneficiary on a Beneficiary’s Share of Income, Deductions, Modifications, and Credits –
Nebraska Schedule K-1N. The total of column (G) must equal the amount entered on line 24,
Form 1041N.

Nebraska Schedule III Instructions

Credit for Tax Paid to Another State for Resident Estate or Trust Only
Purpose. The Nebraska Schedule III is used to calculate the credit for tax paid by a resident estate
or trust to another state, political subdivision of another state, or the District of Columbia.

Line 1 							Nebraska Tax. Enter the amount from line 11, Form 1041N.
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Line 2 							Taxable Income from Another State. Refer to the Conversion Chart. Enter the amount shown

on the return filed with the other state as referenced on the Conversion Chart. Do not include any
income from S corporations or LLCs that is not from Nebraska sources. Dual state residents must
refer to the Special Conversion Chart instructions to properly calculate tax paid to another state.

Line 3 							Computed Tax Credit. Use the mathematical formula provided on line 3 of Nebraska Schedule III
to calculate the amount entered on this line.

Line 4 	 						Tax Due and Paid to Another State. Refer to the Conversion Chart and enter the amount shown

on the return filed with the other state as tax paid to that state. Attach a copy of the income tax return
filed with the other state, or a copy of a letter or statement from the other state or city identifying
the amounts of income and tax paid. If the estate or trust is claiming credit for income tax paid
to a political subdivision of another state for which no annual income tax return is required, then
attach a Federal Form W-2 statement to support the credit claimed.
Prepare a separate Nebraska Schedule III for each state to which you paid in