Live in Nebraska, work in South Dakota
State income tax on wages · single filer · tax year 2026
South Dakota takes
$0
on wages earned there
Nebraska takes
$2,026
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
no work-state taxSouth Dakota has no income tax, so only Nebraska taxes this pay. 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
- South Dakota has no income tax, and that helps you less than you would think. Nebraska taxes its residents on everything they earn, wherever they earn it. So your pay is taxed once, by Nebraska, at $2,026 a year. Working across the line in a state that charges nothing does not shrink that bill, because the bill was never South Dakota's to send.
- This is not one of the country's big crossings. 5,252 jobs in South Dakota are held by people living in Nebraska. The tax rules do not care about that — they are the same ones that apply to the busiest routes in the country. What can differ is how used to the paperwork your employer is.
- South Dakota levies no individual income tax, so a commuter into it is taxed by Nebraska alone, on the whole of the wages, at $2,026 for the reference salary. ⛔ The common expectation — that working in a state without an income tax removes the tax — is exactly backwards for a commuter: residence is what gives Nebraska its claim, and that claim reaches income wherever it is earned. There is no work-state liability to credit against it, so nothing offsets the Nebraska bill. The only version of this that changes the answer is moving.
- This is a smaller corridor by national standards — 5,252 jobs in South Dakota held by Nebraska residents — but the rules that govern it are the same rules that govern the largest ones. Corridor size changes how familiar an employer's payroll department is with the paperwork, never the tax treatment.
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
| South Dakota takes, on wages earned there | $0 |
|---|---|
| Nebraska charges its residents | $2,026 |
| Less the credit Nebraska gives | $0 |
| 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
- City wage taxes are not in these numbers. A few places charge them, and where they do the money is real. If your job in South Dakota is inside a city that taxes workers, add that on top. Where it is not, the state figures above are the whole of it for Nebraska residents.
- The figures take the simple case: one job, in South Dakota, 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 South Dakota 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 South Dakota or Nebraska carries a local layer is a separate question from the state arithmetic above.
- The arithmetic assumes all wages are earned in South Dakota 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 South Dakota portion, computed as a ratio rather than the straightforward cap used above. It also assumes days are worked in South Dakota 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 South Dakota 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 South Dakota'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 South Dakota?
You file in both states, but you do not pay the full amount to both. Nebraska credits the tax South Dakota 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 South Dakota cost me anything extra?
It costs you nothing in tax. $2,026 is what you owe whether you work in South Dakota or at home in Nebraska. The only real cost of the crossing is the extra return.
Do I have to file tax returns in both Nebraska and South Dakota?
Two returns is the normal outcome here, even when only one state ends up taking anything. South Dakota generally wants to see a non-resident return from people who work there, and Nebraska wants your whole picture. It is paperwork rather than extra tax.
What if I work from home in Nebraska some days instead of going to South Dakota?
Working from home usually moves that day's pay out of South Dakota 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 South Dakota, 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 — South Dakota 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 South Dakota'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 South Dakota.
What filing obligations arise in each state on this corridor?
Generally two. Nebraska requires a resident return reporting all income; South Dakota 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 South Dakota'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 South Dakota throughout.