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Nebraska Adjustments Increasing Federal AGI

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Question
What Are Some of the Nebraska Adjustments Increasing Federal AGI?

Answer

Interest Income from All State and Local Obligations Exempt from Federal Tax. List the type of interest income from a state or local obligation exempt from federal tax on line 1a, Schedule I and the associated amount on line 1b. Then calculate the total by adding all amounts on lines 1b. Attach a schedule, if necessary, listing all the obligations. The total amount on line 1, Schedule I must be equal to the amount reported on line 8b of Federal Form 1040 or Form 1040A. This includes state and local bond (municipal bonds) income from all states. Although this income is exempt from federal tax, it is taxable income in Nebraska. Expenses related to this income that have not been previously deducted can be deducted from line 1 only if you itemized deductions on your federal return. Interest income from a regulated investment company (including certain mutual funds) attributable to state and local obligations must also be included on line 1b.

Exempt Interest Income from Nebraska Obligations. List the name of the federally tax exempt bond issued by a Nebraska state or local government subdivision on line 2a and the associated amount on line 2b. Then calculate the total by adding all amounts on lines 2b. Attach a schedule, if necessary, listing all the obligations. Income amounts from regulated investment companies attributable to Nebraska source bonds are also included on lines 2b.

Build America Bonds. Any federally taxable interest received in 2015 on a Build America Bond previously issued by a Nebraska governmental subdivision may be deducted on line 26, Schedule I, Interest From Federally Taxable Build America Bonds Issued by Nebraska Governmental Units.

Financial Institution Tax Credit Claimed. Only shareholders receiving a Statement of Nebraska Financial Institution Tax Credit, Form NFC, from a qualified Nebraska financial institution may claim this deduction. Enter the amount of the tax credit available to you as stated on the 2015 Form NFC. The same amount must be entered on both line 25, Form 1040N and line 4, Schedule I. A copy of Form NFC must be attached to your return. Required supporting documentation may be submitted as an attached PDF document when e-filing your return if your software supports these types of attachments. If the supporting documentation is not received with the return, the Department may request the required documentation during the processing of your return. This may result in a delayed refund.

Nebraska College Savings Program RECAPTURE. If you cancel your Nebraska College Savings Program account or withdraw funds for a non-qualified purpose, the amounts previously claimed as deductions are subject to recapture. A federally qualified rollover to a Section 529 plan sponsored by a state (or entity) other than Nebraska is considered to be a cancellation subject to recapture. The total maximum recapture is the lesser of the amount previously deducted on all Nebraska returns prior to the cancellation of the college savings program account or the amount received upon the cancellation or non-qualified withdrawal of funds. Enter the calculated recapture amount.

Long-Term Care Savings Plan RECAPTURE. If you close a Nebraska Long-Term Care Savings Plan for any reason other than the death of the participant, or if you make any unqualified withdrawal, the amounts previously claimed as deductions are subject to recapture. Enter the recapture amount calculated on unqualified withdrawals on line 6, Schedule I. There is a 10% penalty for unqualified withdrawals. The amount of penalty will reduce your refund or increase your balance due. The Department will bill you for this penalty, or you may pay this penalty with your return.

 

Nebraska ABLE Program RECAPTURE. If you cancel your Nebraska ABLE program account or withdraw funds for a non-qualified purpose, the account owner is subject to recapture on the amounts previously claimed as deductions on the account owner’s return. Only the account owner is subject to recapture. The total maximum recapture is the lesser of the amount previously deducted on all Nebraska returns prior to the cancellation of the Nebraska ABLE program account, or the amount received upon the cancellation or non-qualified withdrawal of funds. Enter the calculated recapture amount.

 

Federal Net Operating Loss Deduction. Enter the amount deducted as a federal net operating loss carryforward from your federal AGI. You must include this loss as an increase to AGI. A previously established Nebraska net operating loss may be deducted on line 23, Nebraska Schedule I.

S Corporation and Limited Liability Company (LLC) Non-Nebraska Loss. Enter the amount of loss from an S corporation or LLC that is not from Nebraska sources. You must include this loss as an increase to AGI.

 

 

 

 

 

 


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Article Details
Views: 1984 Created on: Jun 15, 2013
Date updated: Dec 24, 2018
Posted in: States, Nebraska

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