Does Nebraska Tax Life Insurance Benefits? 
Nebraska does not charge income tax on life insurance benefits except in very limited circumstances . If the life insurance proceeds are left to the estate as opposed to a person , the life insurance benefits can be taxed . There may be taxes on benefits that are above the face amount of the policy . Also , estate taxes can be paid on the excess of what is exempt from estate taxes , which is 5.25 million dollars in 2013 . 