Nebraska to offer full tax exemption to military retirees

LINCOLN, Neb. (AP) — Military retirees who stay in Nebraska after their service ends won’t have to pay state taxes on their retirement income under a new state law approved Tuesday.

Gov. Pete Ricketts signed into law a full tax exemption that will go into effect in 2022. Ricketts approved it outside the governor’s residence, surrounded by state lawmakers and advocates for veterans.

“This is a great win for our state, for Nebraska’s job creators, and for military families looking to put down roots in Nebraska,” Ricketts said, thanking lawmakers for their work to expand the partial exemption that was already in place.

The bill’s sponsor, Sen. Tom Brewer, of Gordon, has said the measure will help Nebraska keep its military retirees, who are often highly educated and have security clearances that make them attractive to military contractors.

Brewer, a veteran himself, said that many military retirees go on to other high-paying careers with incomes that would be taxable in Nebraska. He also pointed to neighboring Iowa, which has lured some retirees from Offutt Air Force Base by exempting military retirement pay.