Live in Nebraska, work in Iowa
State income tax on wages · single filer · tax year 2026
Iowa takes
$1,668
on wages earned there
Nebraska takes
$358
after the credit it gives
Both together
$2,026
state tax for the year
Cost of the line
$0
a year, above working at home
What crossing the line costs
credit covers itNebraska charges more, so its credit covers everything Iowa takes. Both states collect; your total does not change. Solid is what you actually pay; the faded part of the Nebraska bar is the credit it hands back. State income tax only — federal and payroll tax apply on top, and a city wage tax may too.
Which state taxes you, and what it costs
- Nebraska is the dearer of these two states, and that works in your favor here. Whatever Iowa takes out of your pay comes straight back off your Nebraska bill. The total lands at $2,026, which is exactly what you would owe with a job at home. Do not mistake that for being untaxed by Iowa — it takes $1,668, and Nebraska simply covers it.
- Counting only the larger flows, 6 states send workers into Iowa. Nebraska comes in at number 2 with 23,287 jobs, so this crossing is common enough to be routine for payroll departments there.
- Both states tax these wages and the commuter pays no more than they would have at home. Iowa takes its non-resident share first — $1,668 at the reference salary — and Nebraska, whose own liability on the same income is the larger of the two, credits that amount in full and collects the balance. The total is $2,026, identical to what an earner living and working in Nebraska would owe. ⚠️ The money is split between two treasuries rather than reduced, which matters at filing time: two state returns, not one.
- Iowa draws commuters of this scale from 6 states, and Nebraska ranks number 2 among them with 23,287 jobs. A work state pulling from that many directions tends to have a well-established non-resident filing routine, which is a practical convenience rather than a tax saving.
Where the money goes
A $75,000 salary
- Federal income tax$7,670
- Social Security and Medicare$5,738
- State income tax$2,709
- Yours$58,884
| Federal income tax10.23% | $7,670 |
|---|---|
| Social Security and Medicare7.65% | $5,738 |
| State income tax3.61% | $2,709 |
| Yours78.51% | $58,884 |
Which rung you are on
A $75,000 salary
| This rung starts at | $66,500 |
|---|---|
| Next rung starts at | $121,800 |
| Room before it | $46,800 |
Federal only, measured on gross pay — so the first rung is what the standard deduction covers.
The arithmetic, step by step
| Iowa takes, on wages earned there | $1,668 |
|---|---|
| Nebraska charges its residents | $2,026 |
| Less the credit Nebraska gives | $1,668 |
| Total state tax | $2,026 |
| If you also worked in Nebraska | $2,026 |
| Difference | $0 |
On a reference salary of $60,000 a year, single filer. Both states run progressive schedules, so the figures do not simply scale — use the tool above for your own salary.
What this page does not cover
- One thing this page leaves out: city taxes. Some cities charge their own tax on people who work there, and it sits on top of everything above. Philadelphia is the well-known one. New York City only charges its own residents, so commuting in adds nothing. Check whether the city you work in is one that charges, because the Iowa state figure is not the whole story if it does.
- The figures take the simple case: one job, in Iowa, worked in person. Money from several states makes the credit a proportion instead of a cap. Working remotely from Nebraska can pull you under a different rule entirely, depending on the state.
- Sixty thousand a year is the assumption behind these amounts, chosen because nobody publishes average pay for a route between two states. At your own salary the numbers shift. The conclusion about which of Nebraska and Iowa takes more usually does not, but the size of the difference can.
- These figures cover the STATE layer only. City and municipal wage taxes sit on top of them and are not included: a commuter into Philadelphia pays its wage tax on top of anything here, and Ohio's municipalities run their own credit system, which this site models in its own families. New York City, by contrast, taxes only its residents, so a commuter into it adds nothing at the city level. Whether Iowa or Nebraska carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in Iowa and that there is no other income. That matters for the credit: where income comes from several states, Nebraska limits the credit to the share of its own tax attributable to the Iowa portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in Iowa rather than remotely — several states tax a non-resident's remote days as though they were worked at the employer's location, which reverses the usual expectation and is handled on this site's reciprocity pages.
- Dollar amounts are computed at a stated reference salary of sixty thousand rather than a corridor wage average, which no published source provides per state pair. Because both states' liabilities and the credit between them are functions of the same income, the direction of the Nebraska to Iowa comparison holds at other salaries even though the amounts do not — with one qualification worth stating, that a progressive schedule can change the SIZE of the gap at higher incomes, and in Iowa's case a bracket crossed on one side and not the other is exactly where that happens.
Questions people ask
Do I pay state tax twice, to Nebraska and Iowa?
You file in both states, but you do not pay the full amount to both. Nebraska credits the tax Iowa collected, capped at its own charge on that income. The practical result is one bill at the higher of the two levels: $2,026 for the year.
Does working in Iowa cost me anything extra?
Nothing extra, on this route. You end the year owing $2,026, exactly what you would owe if the job were in Nebraska. That is not true of every crossing — plenty of them do cost money — but this one does not. What it does cost you is time at tax filing, because two states may each want a return.
Do I have to file tax returns in both Nebraska and Iowa?
Expect two. Living in Nebraska means filing there on everything you earn. Working in Iowa usually means filing there as well, on the part you earned inside it. The second one is often how the credit gets claimed, so skipping it can cost you money you are owed.
What if I work from home in Nebraska some days instead of going to Iowa?
Working from home usually moves that day's pay out of Iowa and into Nebraska alone. A handful of states disagree and tax remote days as if you had commuted. This page assumes you actually travel to Iowa, so if a lot of your week is at home the split will differ from what you see here.
How is liability allocated between residence and work state on the same wages?
Both jurisdictions assert a claim on the same wages — Iowa on a source basis, Nebraska on residence. The residence state grants a credit for tax paid to the source state, limited to the residence state's own liability on that income. Net combined liability therefore equals the greater of the two liabilities rather than their sum, $2,026 at the reference salary, and the split between the two treasuries is the only thing the credit changes.
Why is the marginal state-tax cost of this crossing zero?
Marginal cost is zero because the binding liability is the residence state's. Nebraska's own charge on this income equals or exceeds Iowa's, so the resident credit absorbs the source-state tax entirely and combined liability equals residence-only liability, $2,026. ⚠️ Zero marginal tax is not zero obligation: a non-resident return may still be required in Iowa.
What filing obligations arise in each state on this corridor?
Generally two. Nebraska requires a resident return reporting all income; Iowa requires a non-resident return reporting the income sourced to it, which is also the mechanism by which the resident credit is substantiated. ⚠️ A filing obligation is distinct from a liability: a reciprocity exemption or a zero net position removes tax without necessarily removing the return, and the non-resident return is frequently what establishes the credit claimed on the resident one.
How do remote working days affect sourcing between these two states?
Ordinarily wages are sourced to where the services are performed, so days worked remotely from Nebraska fall outside Iowa's jurisdiction and the source-state apportionment shrinks accordingly. ⛔ The exception is the "convenience of the employer" rule, which several states apply: a non-resident's remote days are sourced to the employer's location unless the remote work is required by the employer rather than chosen by the employee. The figures on this page model in-person attendance in Iowa throughout.