Instructions
Purpose. The Nebraska WIthholding Allowance Certicate, Nebraska Form W-4N, was developed due to signicant
differences between the federal and Nebraska laws regarding standard deductions and because personal exemption
credits are allowed on the Nebraska income tax return.
The Nebraska Form W-4N will be used by your employer in conjunction with the Nebraska Circular EN to determine
the correct Nebraska income tax withholding. For every federal Form W-4 employers receive, after January 1,2020
a Nebraska Form W-4N must be completed. If you did not complete a federal Form W-4 prior to January 1, 2020
or beginning January 1, 2020 completed a federal Form W-4 but did not submit a Nebraska Form W-4N, your
employer must withhold as if you were single and claimed no withholding allowances.
Nebraska taxpayers that receive pension or annuity payments may also use a Nebraska Form W-4N to determine the
correct withholding for those payments. Beginning January1,2022, the Nebraska Form W-4N will be used by your
pension or annuity payor in conjunction with the Nebraska Circular EN to determine the correct Nebraska income
tax withholding when the federal Form W-4P is completed on or after January 1, 2022.
Withholding allowances directly affect how much money is withheld. The amount withheld is reduced for each
allowance taken. Depending on your personal circumstances, you may not want to claim every allowance you are
eligible to take. If you do not have enough state income tax withheld, you may incur a penalty for underpayment of
estimated tax.
There are penalties for not paying enough Nebraska income tax during the year, either through withholding or
estimated tax payments. You may want to complete the worksheet in the Nebraska Individual Estimated Income Tax
Payment Vouchers booklet to compute an estimated tax liability.
For Employees
Complete the Nebraska Form W-4N so your employer can withhold the correct Nebraska income tax from your
wage payment. When your personal or nancial situation changes, consider completing a new Nebraska Form W-4N.
If you are an employee claiming exemption from withholding, skip lines 1 and 2, write “exempt” on line 3, and
sign the form to validate it. An exemption is valid for only 1 year. You must give your employer a new Nebraska
Form W-4N by February 15 each year to continue your exemption.You cannot claim exemption from withholding if
another person can claim you on their tax return; and your total income exceeds $1,100 and includes more than $350
of unearnedincome.
If your employer is subject to the special withholding procedures specied in the Nebraska Circular EN, you may be
required to submit documentation to your employer to support your claim for exemption from withholding.
For Employers
An employer may withhold an amount that is less than 1.5% of the employee’s taxable wages if the employee provides
sufcient documentation to verify that a lesser amount of income tax withholding is justied in the employee’s
particular circumstance. Documentation may include:
• Verication of the number of children/dependents;
• Marital status; or
• The amount of itemized deductions.
Without documentation, the employee’s income tax withholding must be set either at 1.5% or within the non-shaded
area of the income tax withholding tables in the Nebraska Circular EN for the employee's taxable wage.
Penalties. An employer may be subject to a penalty of up to $1,000 for each employee under-withheld if the
employee’s low income tax withholding is not substantiated.
A taxpayer who intentionally claims an excessive number of exemptions is guilty of a Class II misdemeanor.
Any person who willfully attempts to evade the Nebraska income tax is guilty of a Class IV felony.
Any person who willfully fails to withhold, deduct, and truthfully account for and pay over any income tax withheld
is guilty of a Class IV felony.
Pensions and Annuities
For periodic payments of employer-provided pensions and annuities, the income tax withholding is determined in
the same manner as income tax withholding from wages. Payees with periodic payments from employer-provided
pensions and annuities are subject to Nebraska income tax withholding when the payee (recipient) has elected the
payor to withhold federal income tax from the payments. Payors must use the same number of allowances and the
marital status as claimed by the payee on the Withholding Certicate for Pension or Annuity Payments, Federal
FormW-4P, led with the payor if the federal Form W-4P was completed prior to January 1, 2022. If the payee
completes a federal Form W-4P on or after January 1, 2022, a Nebraska Form W-4N must be completed for Nebraska
income tax withholding purposes.