Nebraska bill would exempt teachers from state income tax starting in 2027

LINCOLN, Neb. (KLKN) — Nebraska lawmakers heard testimony Thursday on a proposal aimed at putting more money back into the pockets of educators by exempting their income from state taxes.

Juarez told lawmakers the measure would create a targeted incentive to attract new teachers and encourage current educators to remain in the state.

If Nebraska passes this bill, it’s creating a special incentive for people to become teachers and to stay in Nebraska.

The proposal comes as Nebraska continues to grapple with teacher shortages, though recent data shows some improvement.

According to the Nebraska Department of Education’s latest teacher vacancy survey, there are about 500 unfilled teaching positions statewide.

That figure is down from last year, a shift education officials described as a positive sign.

Still, staffing challenges persist in several key areas. The report shows ongoing shortages in special education, elementary education, science and mathematics — fields that have historically been difficult to fill.

Education professors and a future teacher at the University of Nebraska-Lincoln, who declined to speak on camera, said a tax exemption could help keep teachers in the state, particularly in communities with the greatest need.

“Of course, this would keep teachers in Nebraska, but most importantly, communities that need them the most,” one future teacher said.

During Thursday’s hearing, several testifiers echoed that sentiment, arguing that a state income tax exemption would improve recruitment and retention by making Nebraska more competitive with neighboring states.

Others, however, questioned the potential cost to the state and whether tax policy alone can address what many describe as a complex workforce issue. Some lawmakers asked whether broader investments in teacher preparation, salary increases and working conditions might also be necessary.

The bill remains in committee. If advanced and ultimately approved by the Legislature, the tax exemption would take effect in 2027.