Income of Partial-Year Resident Individuals Subject to Nebraska Income Tax

004.01 Nebraska adjusted gross income for a partial-year resident individual is all income not taxed by another state which is earned while a resident and all income derived from Nebraska sources according to Reg-22-003, while a nonresident, after the adjustments provided in Reg-22-004.03.

004.02 Income taxed by another state. Income is taxed by another state if the income is subject to tax in the other state, a tax is actually imposed by the other state, and the tax is not satisfied by exemptions or credits, other than credits for estimated payments, withholding, or other taxes paid.

004.03 In determining Nebraska adjusted gross income of a partial-year resident, the following adjustments are made to the partial-year resident's income from Nebraska sources:

004.03A Payment as a self-employed person or partner to a (self-employed SEP, SIMPLE, or other qualified retirement plan. A partial-year resident who is self-employed or a partner who pays into a qualified pension, profit sharing, annuity, or bond purchasing plan shall be allowed this federal deduction only to the extent of the ratio of the Nebraska self-employed or partnership income to the total self-employed or partnership income. 004.03B Payment to an IRA. A partial-year resident who pays into an IRA shall be allowed this federal deduction only to the extent of the ratio of the Nebraska self-employed income and wages to total self-employed income and wages. 004.03C One-half of self-employment tax. A partial-year resident individual shall be allowed this deduction only to the extent of the ratio of the Nebraska self-employed income to the total self-employed income. 004.03D Penalty on early savings withdrawal. A partial-year resident individual shall be allowed this deduction only to the extent that the penalty relates to interest reported as Nebraska source income. 004.03E Moving expenses. A partial-year resident individual may only deduct moving expenses for a move into Nebraska. 004.03F Domestic production activities. A partial-year resident individual shall be allowed this deduction to the extent it is directly related to Nebraska source income. 004.03G Alimony paid. A partial-year resident individual shall be allowed this deduction only to the extent of the ratio of the Nebraska adjusted gross income to federal adjusted gross income after Nebraska adjustments. 004.03H Educator expenses. A nonresident individual shall be allowed this deduction only as it relates to educational wages reported as Nebraska source income. 004.03I Student Loan Interest. A nonresident individual shall be allowed this deduction only to the extent of the ratio of the Nebraska adjusted gross income to federal adjusted gross income after Nebraska adjustments. 004.03J Tuition and fees. A nonresident individual shall be allowed this deduction only to the extent of the ratio of the Nebraska adjusted gross income to federal adjusted gross income after Nebraska adjustments. 004.03K Health Savings Account. A nonresident individual shall be allowed this deduction only to the extent of the ratio of the Nebraska adjusted gross income to federal adjusted gross income after Nebraska adjustments. 004.03L Certain business expenses of reservists, performing artists, and fee-basis government officials. A nonresident individual shall be allowed this deduction to the extent it is directly related to Nebraska source income.

(Sections 77-2715, 77-2733.01, and 77-2772, R.R.S.2003. March 7, 2006.)