Nebraska Homestead Exemption for Homeowners 65 and Older: Income Limits, Home Values and Deadlines
By Justin Anderson, AAMS | Cambridge Advisors Inc. · November 2026
Nebraska homeowners who meet the age-65 requirements may qualify for property-tax relief based on household income and home value. The exemption removes some or all of the home’s eligible value from taxation. Even a 100% income-based exemption may cover only part of the home’s assessed value.
Social Security retirement benefits generally count toward homestead household income, even though Nebraska excludes those benefits from state individual income tax. Taxable IRA withdrawals and Roth conversions can also affect eligibility.
| 2026 age-65 category | Rule |
|---|---|
| Age | Reached age 65 before January 1, 2026 |
| Ownership and occupancy | Generally January 1 through August 15, 2026 |
| Income measured | 2025 household income |
| 100% income-based relief | Single: up to $37,000.99 Married or closely related: up to $43,400.99 |
| No income-based relief | Single: $54,301 or more Married or closely related: $64,501 or more |
| Regular application period | After February 1 through June 30, 2026 |
| Forms and frequency | Form 458 and Schedule I; annually for this category |
Planning for 2027: A 2027 application generally uses 2026 household income. The 2026 income limits and county values in this article must not be treated as 2027 limits. The DOR homestead page listed 2026 as its latest annual table when checked October 29, 2026.
Who qualifies?
For the standard age-65 category, the applicant generally must meet the age, ownership, occupancy, household-income and home-value requirements and file the required annual application. Turning 65 during 2026 does not by itself satisfy the age test for a 2026 application.
The qualifying homestead generally includes the residence or mobile home and surrounding land of no more than one acre. Special rules can apply to ownership through a life estate or trust, transfers to another Nebraska homestead, and absences for health reasons or legal duty. Confirm these situations with the county assessor.
Whose income is included?
Household income generally includes the applicant, spouse, and additional individual owners who occupy the homestead. Another person’s income is not included merely because that person lives in the home; ownership and the program’s other rules matter. Additional owner-occupants generally report their income on separate Schedule I forms.
The married or closely related income table can apply when an otherwise single or head-of-household applicant lives with a brother, sister or parent who is also an owner-occupant. A relative who only lives in the home does not automatically qualify the applicant for this table.
Veterans and individuals with disabilities
| Categories | General distinction |
|---|---|
| 2, 3 and 6 | Qualifying veterans with non-service-connected disabilities and individuals with specified physical or developmental disabilities. Separate income limits and home-value rules apply. |
| 4V and 4S | Qualifying veterans with 100% permanent service-connected disability or a qualifying total disability rating based on individual unemployability, and certain surviving spouses. No income or home-value limits. |
| 5 and 7 | Certain VA-assisted homes and qualifying temporary service-connected disability cases, including eligible surviving spouses. No income or home-value limits. |
The age-65 table is not the disability-category table. Current law generally removes subsequent annual applications for the permanent-disability and surviving-spouse groups specified in § 77-3506(2)(a), (b), (d), (e) and (f). Temporary-disability cases under § 77-3506(2)(c) still require annual applications and VA certification. Confirm the category, status-change notices and documentation with the assessor; some agency instructions predate the 2026 amendments.
2026 household-income limits
The table below applies to the age-65 category and uses 2025 household income. Relief falls in steps of 10 percentage points as income crosses each threshold.
| Income-based relief | Single household | Married or closely related |
|---|---|---|
| 100% | $0-$37,000.99 | $0-$43,400.99 |
| 90% | $37,001-$38,900.99 | $43,401-$45,800.99 |
| 80% | $38,901-$40,800.99 | $45,801-$48,100.99 |
| 70% | $40,801-$42,700.99 | $48,101-$50,400.99 |
| 60% | $42,701-$44,700.99 | $50,401-$52,800.99 |
| 50% | $44,701-$46,600.99 | $52,801-$55,100.99 |
| 40% | $46,601-$48,500.99 | $55,101-$57,500.99 |
| 30% | $48,501-$50,400.99 | $57,501-$59,800.99 |
| 20% | $50,401-$52,400.99 | $59,801-$62,100.99 |
| 10% | $52,401-$54,300.99 | $62,101-$64,500.99 |
| 0% | $54,301 and over | $64,501 and over |
Source: Nebraska Department of Revenue, 2026 Household Income Table. The Department identifies the table as subject to change. Income limits are adjusted annually.
Household income is different from taxable income
The calculation generally begins with federal adjusted gross income, then adds the nontaxable portion of Social Security or railroad retirement benefits, Nebraska adjustments that increase federal AGI, income from Nebraska state and local obligations, and net operating loss carryforwards deducted federally. Qualifying medical expenses may reduce the result.
These additions avoid treating federal or Nebraska income-tax exclusions as automatic exclusions from the homestead test. For example, interest from U.S. Treasury obligations generally remains in household income; Nebraska income-tax subtractions do not automatically reduce it.
Generally, the percentage applies to eligible exempt value after any home-value reduction, not the entire tax bill. Special percentage rules for protected prior recipients are discussed below.
How retirement income affects eligibility
| Source | General homestead treatment |
|---|---|
| Social Security retirement | Benefits generally count in full, including amounts excluded from federal AGI. Do not first subtract Medicare premiums. |
| Traditional IRA / 401(k) | The taxable portion of a withdrawal or Roth conversion generally counts. A nontaxable rollover is different. |
| Qualified Roth IRA withdrawal | Generally excluded because it is not in federal AGI and is not a specified homestead add-back. Nonqualified withdrawals may differ. |
| Interest, dividends and gains | Taxable interest, dividends and realized capital gains generally count. Treasury interest and municipal-bond interest from Nebraska and other states generally count as well. |
| Existing cash / sale proceeds | Spending existing cash is not itself income. A taxable-account sale generally contributes its realized gain or loss, rather than the entire sale proceeds. |
| Qualified charitable distribution | For an eligible IRA owner age 70½ or older, the amount properly excluded from federal AGI generally does not increase household income. QCD requirements still apply. |
Social Security disability payments before full retirement age have different reporting rules: the instructions generally exclude them except to the extent included in federal AGI. Disability benefits convert to retirement benefits at full retirement age.
Medical and dental expenses
Qualifying expenses paid by the applicant, spouse or owner-occupant can reduce household income to the extent they exceed 4% of household income before this deduction. Expenses reimbursed by insurance or paid by others do not qualify.
Eligible costs may include prescribed medicines, insulin, licensed medical care, Medicare Part B, Medicare supplement and Part D premiums. The instructions exclude employer-sponsored plans, nonprescription medicines, and self-employed insurance already deducted in calculating total income, among other items.
Example: With $50,000 of pre-deduction household income and $6,000 of qualifying expenses, the deduction is $6,000 - ($50,000 × 4%) = $4,000. Resulting household income is $46,000. This is the homestead calculation, not the federal Schedule A deduction.
Home value is a separate test
For the age-65 category, the starting exempt amount is generally the lesser of the home’s taxable value or the greater of the county’s average assessed single-family residential value and $40,000.
The separate maximum home-value limit generally is the greater of 200% of that county average and $95,000. Without an applicable exception, the exempt amount is reduced by 10% for each $2,500 of value above the maximum; a home at least $20,000 above the maximum is ineligible.
| County | Exempt-value cap | Maximum home value | No exemption at or above* |
|---|---|---|---|
| Douglas | $302,282 | $604,564 | $624,564 |
| Lancaster | $333,050 | $666,100 | $686,100 |
| Sarpy | $344,147 | $688,294 | $708,294 |
*General valuation rule for the age-65 category; qualifying prior-recipient protection may apply. Source: DOR 2026 Average Residential Value table. The final column is the maximum value plus $20,000. These are assessed-value rules, not estimated sale-price limits.
For example, a qualifying Douglas County home assessed at $450,000 starts with an exempt-value cap of $302,282 in 2026. At a 100% income-based percentage, $302,282 could be exempt, leaving $147,718 of assessed value subject to tax, before any other applicable provisions.
Protection for qualifying prior recipients
Beginning with 2025, § 77-3506.03 provides protection when a homestead received an exemption in the prior year while valued below the maximum and then rises to or above that maximum. The protection does not apply when improvements caused the increase to the maximum or higher.
For a home that qualifies for this protection, the statute preserves the percentage from the last qualifying year in which the value was below the maximum. Continued eligibility still depends on the other statutory requirements, including household income. This is not a blanket guarantee of a fixed tax bill or future eligibility.
Ask the assessor to confirm both whether the protection applies and how the preserved percentage is calculated. Do not assume a large assessment increase alone establishes eligibility.
What an additional IRA withdrawal can change
Consider a hypothetical married couple who met the age requirement before January 1, 2026, and otherwise qualify in Douglas County. Their home is assessed at $280,000, below the county’s 2026 exempt-value cap.
Compare $47,000 of 2025 household income with $52,000 after an additional $5,000 fully taxable IRA withdrawal in 2025. Assume no medical-expense deduction and no other changes.
| 2026 application | Original income | With withdrawal |
|---|---|---|
| 2025 household income | $47,000 | $52,000 |
| Income-based percentage | 80% | 60% |
| Eligible home value | $280,000 | $280,000 |
| Exempt assessed value | $224,000 | $168,000 |
| Taxable value before other provisions | $56,000 | $112,000 |
The withdrawal crosses two income thresholds. Exempt assessed value falls by $56,000: $280,000 × (80% - 60%). That is additional value subject to tax, not a $56,000 tax bill.
At a combined levy of 2.0%, chosen only for illustration, the additional property tax would be $56,000 × 2.0% = $1,120. Actual levies and tax bills differ. Federal and Nebraska income tax on the withdrawal is separate and is not calculated here.
The withdrawal occurred in 2025 and affects the 2026 application. A withdrawal during 2026 would generally affect the 2027 application, using the applicable 2027 limits.
Put the property-tax cost in the full plan
Crossing an income threshold can reduce relief in a single step, even if income only slightly exceeds the boundary. Within one tier, additional income may leave the exemption percentage unchanged. The household’s position relative to the thresholds matters.
A withdrawal or conversion that reduces relief may still meet spending needs or improve a long-term tax plan. Compare the potential property-tax cost with income taxes, future required distributions, Medicare premiums and liquidity needs before deciding.
This illustration is not an actual client outcome, an investment-performance presentation or a forecast of savings. It assumes all other eligibility requirements are met and the home value, levy and relevant income items remain as stated.
When and how to apply
For the standard age-65 category, file Form 458 and Schedule I with the county assessor each year after February 1 and on or before June 30. A federal income-tax extension does not by itself extend the Form 458 deadline.
As of October 29, 2026: The regular 2026 filing period, the July 20 county-board extension deadline and the ordinary October 15 Schedule I extension deadline have passed. Limited statutory late-filing routes may still be available.
| Situation | General rule |
|---|---|
| County-board extension | On written request, the county board may extend the application deadline to July 20. An applicant who received an extension in the immediately preceding year cannot receive another. |
| Medical condition | Late filing may be available if a medical condition impaired timely filing. Certification from a physician, physician assistant or advanced practice registered nurse is required on the prescribed form. |
| Death of spouse | A qualifying late application requires the death certificate of a spouse who died during the year for which the exemption is requested. |
| Delayed VA certification | A qualifying late application requires documentation that the specified VA certification was received after June 30. |
| Federal tax-return extension | Form 458 generally must still be filed by June 30 with reference to the extension. Schedule I is generally due by October 15 or the applicable IRS October deadline. |
Under § 77-3514.01, the medical-condition, spouse-death and delayed-VA-certification routes have separate documentation requirements and a June 30 deadline tied to the year the relevant real estate taxes become delinquent. For a qualifying late application for the 2026 tax year, that ordinarily means June 30, 2027. Confirm the route and deadline with the assessor promptly.
Rejection or denial notices can carry short appeal deadlines and different county or state procedures. Follow the notice and contact the issuing office promptly. Do not wait for the next annual filing period if you intend to appeal.
Forms and assessor contacts: revenue.nebraska.gov/PAD/homestead-exemption.
Common questions and next steps
Can a household with substantial savings qualify?
Potentially. The standard test measures household income rather than the balance of savings or investments. Home value has its own limits. Interest, dividends, gains and taxable distributions from those assets can still affect eligibility.
Does Nebraska tax-free income always stay out?
No. Social Security retirement benefits, Treasury interest and municipal-bond interest generally count in the homestead calculation despite different income-tax treatment. Use Schedule I rather than Nebraska taxable income alone.
Does qualifying this year guarantee next year?
No. For the age-65 category, eligibility is reviewed annually using prior-year income, current applicable limits and the other requirements. Home-value protection for certain prior recipients does not waive those requirements.
How does this fit into a retirement income plan?
Review potential withdrawals and conversions with your financial planner and tax professional before year-end. Bring your income projection, medical-expense records, property valuation, tax statement and prior homestead determination. Cambridge Advisors can discuss how these decisions fit into your retirement income plan.
Important disclosures
Cambridge Advisors Inc. is a fee-only investment adviser registered with the U.S. Securities and Exchange Commission and based in Omaha, Nebraska. Registration does not imply a particular level of skill or training. This article is general educational information, not personalized investment, tax, accounting or legal advice. Cambridge Advisors does not provide tax or legal advice. Consult qualified tax and legal professionals about your circumstances.
Tax laws, interpretations and annual limits may change. The county assessor and Nebraska Department of Revenue determine eligibility within their respective responsibilities. No tax savings or other outcome is guaranteed. Investment and retirement decisions involve tax, liquidity and market risks, including possible loss of principal. Advisory fees and other investment costs affect account results. Information about services, fees and conflicts is available in the firm’s Form ADV and Form CRS through the SEC Investment Adviser Public Disclosure website.
Reviewed October 29, 2026.
Primary references
Neb. Rev. Stat. §§ 77-3501.01, 77-3502, 77-3504, 77-3505, 77-3505.02, 77-3506, 77-3506.03, 77-3507, 77-3512 and 77-3514.01; DOR 2026 Household Income Table, Average Residential Value table, Form 458 and Schedule I instructions, and Homestead Exemption Information Guide; IRS Publication 590-B. Current statutory text: Nebraska Legislature, Chapter 77.