Bill
LB 710
LB 710 increases Nebraska’s refundable EITC from 10% to 20% of the federal EITC for AGI ≤ $29,000, effective 2025; higher-AGI credits stay at 25% nonrefundable.
Nebraska Legislation Summary: LB 710 (2025)
Overview
- Bill number and title: LB 710, Increase the earned income tax credit
- Primary sponsor: Senator Eliot Bostar
- Introducer’s intent: Increase the state earned income tax credit (EITC) from 10% to 20% of the federal EITC
- Status and process: Introduced January 22, 2025; Committee on Revenue; hearing held February 19, 2025
- Notable procedural notes: The bill would amend section 77-2715.07 and repeal the original version, updating the EITC framework for Nebraska residents
What the bill would do (key provisions)
- Core change to the EITC:
- The refundable portion of Nebraska’s earned income tax credit for low- to moderate-income residents would be increased. Specifically, for eligible taxpayers with federal adjusted gross income (AGI) of $29,000 or less, the refundable credit would rise from 10% to 20% of the federal EITC.
- For federal EITC eligibility thresholds above $29,000, the bill maintains the nonrefundable credit equal to 25% of the federal EITC (as currently configured in the statute).
- Structure of credits (as currently described in the bill text for other credits remains, with the EITC reforms isolated to the refundable portion):
- Nonrefundable credits (for higher AGI thresholds) and other existing credits remain governed by the statute’s current framework (e.g., credits for taxes paid to other states, and various other Nebraska tax credits listed in the statute).
- The bill specifically targets the refundable component of the EITC by increasing the percentage that Nebraska provides publicly in line with the federal credit for lower-income filers.
- Effective year for the change:
- The refundable EITC percentage is updated to 20% of the federal EITC for taxable years beginning on or after January 1, 2025 (i.e., the 2025 tax year and beyond).
Who would be affected
- Eligible Nebraska resident individuals with federal EITC eligibility:
- Those with federal AGI of $29,000 or less would see an increase in the Nebraska refundable EITC portion from 10% to 20% of the federal EITC.
- Taxpayers with higher AGI thresholds (above $29,000) would continue to receive the nonrefundable Nebraska credit equal to 25% of the federal EITC, per current structure.
- Broader economic impact: Increased EITC support is intended to bolster net income for low- and moderate-income Nebraska households, potentially affecting consumer spending, poverty reduction, and workforce participation incentives.
Timeline and procedural context
- Introduced: January 22, 2025
- Committee: Revenue
- Hearing date: February 19, 2025
- Legislative status: Requires passage by both chambers and gubernatorial signature to become law (not specified in the provided excerpt)
Notes
- The bill text references related tax credits and sections beyond the EITC (e.g., other Nebraska credits), but LB 710’s primary, stated purpose is the enhancement of the state EITC refundable portion from 10% to 20% of the federal credit for eligible low-income Nebraskans.
Compiled from official sources — confirm details with the bill’s official record.
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