Qualifying employee; exclusion of wage income; conditions; recapture; when

(1) For taxable years beginning or deemed to begin on or after January 1, 2025, under the Internal Revenue Code of 1986, as amended, a qualifying employee shall be eligible to make a one-time election within two calendar years of becoming a Nebraska resident to exclude all Nebraska-sourced wage income earned and received from an employer, to the extent included in federal adjusted gross income, if (a) the annual Nebraska-sourced wage income of the position accepted by the qualifying employee is at least seventy thousand dollars per year but not more than two hundred fifty thousand dollars per year and (b) the qualifying employee was not a resident of the state in the year prior to the year in which residency is being claimed for purposes of qualifying for such exclusion.

(2) For any qualifying employee who fails to maintain residency for two full calendar years following the calendar year in which the exclusion was taken, any reduction in tax as a result of such exclusion shall be fully recaptured from the qualifying employee by the department. The amount required to be recaptured shall be deemed an underpayment of tax and shall be due and payable on the tax return that is due immediately following the loss of residency.

(3) Notwithstanding any other limitation contained in the laws of this state, collection of any taxes deemed to be an underpayment by this section shall be allowed for a period of three years following the due date of the recaptured taxes.

(4) For taxable years beginning or deemed to begin on or after January 1, 2026, under the Internal Revenue Code of 1986, as amended, the department shall adjust the dollar amounts provided in subsection (1) of this section by the same percentage used to adjust individual income tax brackets under subsection (3) of section 77-2715.03 .