Nebraska state senators call attention to potential property tax rebate delay
LINCOLN, Neb. (WOWT) - Three state senators warned Nebraskans on Monday about an unwelcome surprise included in the property tax reform package passed during last month’s special session.
State Sens. Justin Wayne of Omaha, Steve Halloran of Hastings, and Steve Erdman of Bayard said in a statement on Monday that LB34, the property tax reform bill, contains language that will affect the 30% rebate that property taxpayers would expect to claim on their 2024 state income tax return.
The three say that bill “front-loads” the 30% property tax credit that goes to schools so that it becomes “automatic.” However, the new law eliminates the property tax credit for the 2023 year, which the senators say means higher property taxes this year.
The senators say there are two ways the Legislature can fix the problem:
- Allow taxpayers to claim the credit for their 2023 property taxes when they file their 2024 income tax returns
- Double the front-loaded credit that property owners will receive in 2025
The state is holding about $700 million in funds belonging to taxpayers who never filed for the redit, and the senators say Nebraska officials have no intention of returning it.
Read the senators’ full statement
“We three State Senators, Steve Erdman (LD47), Steve Halloran (LD33), and Justin Wayne (LD13) have important information to report about the tax relief bill that was passed during the special session. LB 34 contains important language that will affect the 2023 property tax credit that taxpayers are entitled to receive on their 2024 income tax return. Because the language of the bill put an end to the rebate beginning January 1, 2024, taxpayers will not be able to claim the 30 percent property tax rebate that is owed them on their 2024 income tax return.
LB34 pulls a slight-of-hand tactic on property owners. The bill front loads the 30 percent property tax credit that goes to the schools so that it becomes automatic. In the future taxpayers won’t have to claim it as a credit on their state income tax return, and that part of the bill is good. However, the bill also eliminates the property tax credit for the year 2023, and that’s the bad news, which in turn makes it a property tax increase for 2023.
The State of Nebraska needs to rectify this problem. For example, if the credit on a person’s 2023 property tax statement is worth $1,000, then in 2025 he or she should receive the $1,000 owed him from the credit plus an additional $1,000 for his 2024 property taxes which have now been front loaded for a total of $2,000. Instead, that individual will only receive the $1,000 which has been front loaded onto his 2024 property taxes.
There are two ways that the State Legislature can fix this problem. The first way would be to allow taxpayers to claim the credit for their 2023 property taxes when they file their 2024 income tax returns. The second way would be to double the front-loaded credit that property owners will receive in 2025. Last year $565 million dollars was credited to property owners in the form of the property tax credit. Consequently, the State of Nebraska is holding approximately $700 million of money belonging to the taxpayers who never filed for the credit and they have no intention of ever returning it to the taxpayers. Whose money is it?”
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