Nebraska Administrative Code › Topic - REVENUE, DEPARTMENT OF › Title 316 - NEBRASKA DEPARTMENT OF REVENUE › Chapter 22 - INDIVIDUAL INCOME TAX REGULATIONS › Section 316-22-003 - INCOME OF NONRESIDENT INDIVIDUALS SUBJECT TO NEBRASKA INCOME TAX

Current through June 17, 2024
003.01 Nebraska adjusted gross income for a
				nonresident individual is the nonresident's income from Nebraska sources after
				the adjustments provided in Reg-22-003.02. Income derived from Nebraska sources
				shall include, but not be limited to, items relating to real and tangible
				personal property, a business, trade, profession, or occupation, compensation
				for services, intangible property, small business corporations, partnerships,
				estates and trusts, and lottery and gambling winnings.
003.01A
Real or tangible personal
				property.
The ownership of any interest in real or tangible personal
				property located in Nebraska shall be sufficient to qualify any income, gain,
				or loss from such real or tangible personal property as derived from or
				connected with Nebraska sources. This would include rents or royalties from
				property located in Nebraska for any period of time during the taxable year,
				and any gain or loss from the sale of property located in Nebraska.
003.01B
Business, trade, profession, or
				occupation.
Income from sources in Nebraska as it relates to a business,
				trade, profession, or occupation carried on in Nebraska shall mean that portion
				of an individual's gross income that is reasonably and equitably attributable
				to Nebraska, irrespective of the accounting method employed.
The Nebraska source income of a business, trade, profession,
				  or occupation shall be determined by use of the apportionment factor as
				  provided for the taxing of corporations under the Nebraska Revenue Act and
				  Reg-24-023. If
				  the portion of taxable income derived from sources in Nebraska so determined
				  does not reasonably and equitably reflect Nebraska source income, the Tax
				  Commissioner may allow alternative methods of determining income from Nebraska
				  sources.
003.01C
				Compensation for Services.
003.01C(1)
Generally.
Compensation received by a nonresident for services
				performed which are directly related to a business, trade, or profession
				carried on within Nebraska shall constitute income derived from Nebraska.
Compensation received by a nonresident will be considered
				  Nebraska source income if the nonresident's services are performed entirely
				  within Nebraska, if such services performed without Nebraska are incidental to
				  the services performed within Nebraska, or if the services that have to be
				  performed in Nebraska are an essential part of the services performed.
If the nonresident's service is performed without Nebraska
				  for his or her convenience, but the service is directly related to a business,
				  trade, or profession carried on within Nebraska and except for the
				  nonresident's convenience, the service could have been performed within
				  Nebraska, the compensation for such services shall be Nebraska source
				  income.
When a taxpayer has performed some service in this state and
				  the base of operations, or, if there is no base of operations, the place from
				  which the services are directed or controlled is in this state, the
				  compensation paid by a business, trade, or profession for all services of the
				  taxpayer shall be income from Nebraska sources.
003.01C(2)
Commissions.
Income
				from commissions earned by a nonresident traveling salesman, agent, or other
				employee for services performed or sales made whose compensation depends
				directly on the volume of business transacted by him or her, may be allocated
				to Nebraska based upon specific identification of each item of income and
				expense. Allocation may be used only when the books and records of either the
				nonresident or his or her employer accurately reflect the business transacted
				and expenses incurred in Nebraska by the nonresident in connection therewith.
				If the books and records do not accurately reflect the business transacted and
				expenses incurred in Nebraska by the nonresident, the nonresident will include
				that proportion of the compensation received which the volume of business
				transacted by such employee within the State of Nebraska bears to the total
				volume of business transacted by him, or her, both within and without the
				state. (See Reg-21-006.01 )
003.01C(3)
Periodic employment in
				Nebraska.
If a nonresident employee is employed in this state at
				intervals throughout the year and is paid on an hourly, daily, weekly, or
				monthly basis, the gross income from sources within this state must include
				that portion of the total compensation for personal services which the total
				number of working hours, days, weeks, or months employed within Nebraska
				compare to the total number of such working intervals both within and without
				the state. If the majority of the interval is spent within this state, then the
				entire interval is within this state. (See Reg-21-006.02 and Reg-21-006.04 )
If a nonresident employee is paid on a mileage basis, the
				  gross income from sources within Nebraska must include that portion of the
				  total compensation for services which the number of miles traveled in Nebraska
				  bears to the total number of miles traveled both within and without Nebraska.
				  (See Reg-21-006.03 )
If the nonresident employee is paid on some other basis, the
				  total compensation for personal services must be apportioned between this state
				  and other states and foreign countries in such manner as to attribute to
				  Nebraska that portion of the total compensation which is reasonably
				  attributable to personal services performed in the state.
003.01C(4)
Services of fiduciary.
Compensation paid by a resident trust or estate, as defined in
				Reg-23-001,
				for services by a nonresident fiduciary shall constitute income from sources
				within Nebraska.
003.01C(5)
Professional services.
Nonresident attorneys, physicians,
				engineers, architects, nurses, or any other professional people, even though
				not regularly employed in carrying on their profession in Nebraska, must
				include as income from sources within this state the entire amount of fees or
				compensation received for services performed in Nebraska as defined in
				Reg-21-003.01C(1)(1)
				on behalf of their clients.
003.01C(6)
Entertainers and
				athletes.
Nonresident actors, singers, performers, wrestlers, boxers,
				professional athletes, etc., must include as income from sources within
				Nebraska the gross amount received from performances within the
				state.
003.01C(7)
Military
				service members.
Income derived from or connected with Nebraska sources
				does not include compensation paid to nonresidents for active duty service in
				the armed forces of the United States, even though such service is performed
				within Nebraska. If the service member has elected to file a joint Nebraska
				return with a Nebraska resident or partial-year resident, the nonresident's
				military income is deducted as an adjustment on the Nebraska return. (See
				Reg-22-013 ).
The term "service" means the service of an individual who is
				  a member of the Army, Navy, Air Force, Marine Corps, or Coast Guard who is on
				  active duty, as defined in section 101(d)(1) of title 10, United States Code,
				  and in the case of an individual who is a member of the National Guard,
				  includes service under a call to active service authorized by the President or
				  the Secretary of Defense for a period of more than 30 consecutive days under
				  section 502(f) of title 32, United States Code, for purposes of responding to a
				  national emergency declared by the President and supported by Federal funds.
				  The term also includes active service by an individual who is a commissioned
				  officer of the federal Public Health Service or the National Oceanic and
				  Atmospheric Administration.
The term service as used herein does not include service of a
				  civilian in the employ of any branch of the armed forces nor does it include
				  any individual, partnership, corporation or other association which, as an
				  independent contractor, is performing service or supplying tangible property to
				  any branch of the armed forces. All other nonresident federal employees who
				  perform their services in Nebraska shall be deemed to have income derived from
				  or connected with Nebraska sources.
003.01C(8)
Pensions.
Nonresidents who are receiving pensions, deferred compensation, or
				annuities based on services performed within Nebraska in an earlier tax year do
				not have income from Nebraska sources.
003.01C(9)
Employees of Rail Carriers.
Compensation paid by a rail carrier to a nonresident employee who
				performs regularly assigned duties on a railroad in more than one state is not
				included in Nebraska source income.
003.01C(10)
Employees of Motor Carriers
				or Private Carriers.
Compensation paid by a private carrier or a motor
				carrier providing transportation in interstate commerce subject to federal
				regulation to a nonresident employee who performs regularly assigned duties
				with respect to a motor vehicle in more than one state is not included in
				Nebraska source income.
003.01C(11)
Employees of Air Carriers.
Compensation paid by an air carrier to
				a nonresident employee who is regularly assigned duties on aircraft in more
				than one state is not included in Nebraska source income if the employee's
				scheduled flight time in Nebraska is fifty percent or less of the total
				scheduled flight time of the employee during the calendar year.
003.01D Intangible property.
003.01D(1)
Interest and dividends.
No tax is to be imposed on a nonresident receiving income which arises
				from annuities, interest on bank deposits, interest on bonds, notes or other
				interest bearing obligations, or dividends from corporations, except to the
				extent to which the same shall be a part of the taxable income from any
				business, trade, profession, or occupation carried on in Nebraska by the
				nonresident. Income from intangible property shall be a part of taxable income
				of a business, trade, profession, or occupation carried on within Nebraska when
				such property is acquired or used in the course of such business, trade,
				profession, or occupation.
003.01D(2)
Gains and losses.
Gains or losses from the sale, exchange, or other disposition of
				intangibles are not subject to tax by Nebraska, except to the extent to which
				the same shall be a part of the income from a business, trade, profession, or
				occupation carried on in the State of Nebraska by the nonresident taxpayer,
				even though the sale or disposition thereof may have been consummated within
				the state.
Likewise, losses sustained from the sale, exchange, or other
				  disposition of stocks, bonds, or other intangibles under like conditions are
				  not deductible from the Nebraska source income of the nonresident taxpayer,
				  except to the extent that they are losses incurred in a business, trade,
				  profession, or occupation carried on within Nebraska by the nonresident
				  taxpayer.
003.01E S corporations.
003.01E(1)
Nebraska source income.
A nonresident stockholder of a small business corporation having an
				election in effect under Subchapter S of the Internal Revenue Code shall file a
				Nebraska income tax return and shall include as Nebraska source income that
				portion of the S corporation's income derived from or attributable to Nebraska.
				The nonresident shareholder shall file a Nebraska income tax return even though
				the income derived from the S corporation is the nonresident's only income
				derived from or attributable to Nebraska except as allowed under
				Reg-22-003.01E(3)(3).
003.01E(2)
Agreement to pay tax.
A nonresident shareholder of an S corporation which has Nebraska income,
				may execute and forward to the corporation a Nebraska Nonresident Income Tax
				Agreement, Form 12N, which states that the nonresident will file a Nebraska
				income tax return and pay tax on all income derived from or connected with
				Nebraska sources. This agreement must be forwarded to the S corporation before
				the filing of the original corporate return.
003.01E(3)
Withholding by an S
				corporation.
In the absence of the above agreement, the S corporation
				must remit to the Nebraska Department of Revenue a percentage of the
				nonresident shareholder's Nebraska income. The percentage shall be the highest
				rate applicable to individuals. Upon request by any nonresident shareholder,
				the S corporation must complete a Statement of Nebraska Income Tax Withheld for
				Nonresident Individual, Form 14N. When an S corporation has made a remittance
				to the Nebraska Department of Revenue on behalf of a nonresident shareholder,
				such nonresident may choose not to file a return, and the amount withheld shall
				be retained in satisfaction of the liability, or such nonresident may file a
				return and claim the corporation's remittance as a credit against his or her
				Nebraska income tax liability.
003.01F Partnerships.
003.01F(1)
Nebraska source income.
A nonresident partner of a partnership shall file a Nebraska income tax
				return and shall include his or her distributive share of partnership income,
				gain, loss, and deduction from sources within Nebraska, except as allowed under
				Reg-22-003.01F(3)(3).
003.01F(2)
Agreement to pay tax.
A nonresident partner of a partnership which has Nebraska income may
				execute and forward to the partnership a Nebraska Nonresident Income Tax
				Agreement, Form 12N, which states that the nonresident will file a Nebraska
				income tax return and pay tax on all income derived from or connected with
				Nebraska sources. This agreement must be forwarded to the partnership before
				the filing of the original partnership return.
003.01F(3)
Withholding by partnership.
In the absence of the above agreement, the partnership must remit to the
				Nebraska Department of Revenue a percentage of the nonresident partner's
				Nebraska income. The percentage shall be the highest rate applicable to
				individuals. Upon request by any nonresident partner, the partnership must
				complete a Statement of Nebraska Income Tax Withheld for Nonresident
				Individual, Form 14N. When a partnership has made a remittance to the Nebraska
				Department of Revenue on behalf of a nonresident partner, the nonresident
				partner may choose not to file a return and the amount withheld shall be
				retained in satisfaction of the liability, or such nonresident partner may file
				a return and claim the partnership's remittance as a credit against his or her
				Nebraska income tax liability.
003.01G Limited Liability Companies (LLC's).
003.01G(1)
Nebraska source income.
A nonresident member of an LLC shall file a Nebraska income tax return
				and shall include as Nebraska source income that portion of the LLC's income
				derived from or attributed to Nebraska, except as allowed under
				Reg-22-003.01G(3)(3).
003.01G(2)
Agreement to pay tax.
A nonresident member of an LLC which has Nebraska income may execute and
				forward to the LLC a Nebraska Nonresident Income Tax Agreement, Form 12N, which
				states that the nonresident will file a Nebraska income tax return and pay tax
				on all income derived from or connected with Nebraska sources. This agreement
				must be forwarded to the LLC before the filing of the original partnership
				return.
003.01G(3)
Withholding by LLC.
In the absence of the above agreement, the LLC
				must remit to the Nebraska Department of Revenue a percentage of the
				nonresident member's Nebraska income. The percentage shall be the highest rate
				applicable to individuals. Upon request by any nonresident member, the LLC must
				complete a Statement of Nebraska Income Tax Withheld for Nonresident
				Individual, Form 14N. When an LLC has made a remittance to the Nebraska
				Department of Revenue on behalf of a nonresident member, the nonresident member
				may choose not to file a return and the amount withheld shall be retained in
				satisfaction of the liability, or such nonresident member may file a return and
				claim the LLC's remittance as a credit against his or her Nebraska income tax
				liability.
003.01H
				Estates and trusts.
003.01H(1)
Nebraska
				source income.
A nonresident beneficiary of a trust or estate shall be
				taxed only on items of income, gain, loss, or deduction which were derived from
				or connected with sources within Nebraska and which were taxable to him or her
				for federal income tax purposes. If a trust is classified as a Grantor Trust
				for federal income tax purposes, the nonresident grantor thereof shall be taxed
				on all items of income, gain, loss, or deduction which were derived from or
				connected with Nebraska sources, regardless of whether or not actually
				received. (See
				Reg-23-003 and
				Reg-23-004.04A(1)(1)
				).
The residence of the fiduciary of an estate or trust will not
				  be determinative as to whether income from intangibles is Nebraska source
				  income. Nor shall the classification of a trust or estate as resident or
				  nonresident have any effect upon the taxation of a nonresident beneficiary for
				  his or her share of trust income, gain, or loss.
The character of income, gain, or loss from intangible
				  personal property held in a trust or estate shall be the same with regard to a
				  nonresident beneficiary (or a nonresident grantor of a Grantor Trust) as if
				  said beneficiary (or grantor) had received the income, gain, or loss without
				  the trust or estate.
003.01H(2)
Agreement to pay tax.
A nonresident beneficiary deriving Nebraska income from a trust or
				estate may execute and forward to the trust or estate a Nebraska Nonresident
				Income Tax Agreement, Form 12N, which states that the nonresident will file a
				Nebraska income tax return and pay tax on all income derived from or connected
				with Nebraska sources. This agreement must be forwarded to the trust or estate
				before the filing of the original fiduciary return.
003.01H(3)
Withholding by fiduciary.
In the absence of the above agreement, the estate or trust must remit to
				the Nebraska Department of Revenue a percentage of the nonresident
				beneficiary's income which was derived from or attributable to Nebraska
				sources. The percentage shall be the highest rate applicable to individuals.
				Upon request by any nonresident beneficiary, the estate or trust must complete
				a Statement of Nebraska Income Tax Withheld for Nonresident Individual, Form
				14N. When a trust or estate has made a remittance to the Nebraska Department of
				Revenue on behalf of a nonresident beneficiary, the nonresident beneficiary may
				choose to file a return and the amount withheld shall be retained in
				satisfaction of the liability, or such nonresident beneficiary may file a
				return and claim the remittance made by the trust or estate as a credit against
				his or her Nebraska income tax liability.
003.01I
Lottery and gambling winnings.
All lottery winnings from a lottery game conducted pursuant to a
				Nebraska lottery are Nebraska source income. All winnings from any game or
				operation licensed under the Nebraska Bingo Act, the Nebraska Lottery and
				Raffle Act, the Nebraska County and City Lottery Act, the Nebraska Pickle Card
				Lottery
Act, the Nebraska Small Lottery and Raffle Act or the State
				  Lottery Act are Nebraska source income. All winnings from any other licensed or
				  unlicensed operation involving any game of chance are Nebraska source income if
				  the wager was placed in Nebraska, or any ticket, chance, or any other entry fee
				  was purchased in Nebraska.