Gov. Ricketts Announces Plan to Expand Military Retirement Tax Relief
Gov. Ricketts, State Senators, NDVA Director Hilgert, Maj. Gen. Bohac, and Nebraska veterans unveil a plan for new tax relief.
LINCOLN – Today, Governor Pete Ricketts announced a new plan to expand military retirement tax relief. He was joined by Nebraska Department of Veterans’ Affairs (NDVA) Director John Hilgert, Adjutant General of the Nebraska National Guard Major General Daryl Bohac, President of the Nebraska Chapter of the Military Officers of Association of America (MOAA) Colonel Dan Donovan, and State Senators, as well as members of state veterans’ organizations.
“Over the years as I have traveled Nebraska, military retirement tax relief has been a top priority for veterans and their families,” Governor Ricketts said. “We want to make Nebraska the most veteran-friendly state in the country and encourage our heroes to stay in our state and move here. Surrounding states provide tax relief for veterans, and with this proposal, we can make our state more competitive regionally and nationally.”
The new proposed law would exempt 50% of military retirement pay from being taxed, and would include all of Nebraska’s military retirees receiving payments from the Department of Defense. As of fiscal year 2017, this included over 13,000 Nebraskans. The plan would deliver $15 million in tax relief for our state’s retired military veterans annually.
Currently, only certain retired military personnel in Nebraska have options for partial income tax exemptions for their military retirement pay. Starting on taxable year January 1, 2015, certain retired veterans have been able to choose to exempt 40% of their military retirement pay for seven taxable years or 15% of their military retirement pay starting once they turn 67 years of age. Those who retired before July 18, 2012 are not eligible for any income tax exemption.
“Veterans groups in Nebraska have been talking about this issue and working towards this for at least 20 years,” said Nebraska MOAA President Col. Dan Donovan. “Not only will it encourage veterans to decide to remain in Nebraska, it will enhance our state’s ability to meet the growing need for technologically adept and motivated employees and entrepreneurs starting businesses. It’s a win-win for Nebraska.”
“I want to thank Governor Ricketts for his leadership and dedication to serving our state’s veterans,” said NDVA Director John Hilgert. “This is one of the most frequently discussed topics among military personnel in our state, so to see something being done about it is extremely exciting. I appreciate our governor’s responsiveness and the leadership that follows!”
"This bill demonstrates that Nebraska is committed to retaining Active Duty, Reserves, and National Guard Service members in our state,” said Maj. Gen. Bohac. “This bill also helps Governor Ricketts' goal of growing Nebraska by helping to prevent the loss of our veterans to our surrounding states. This is one more example of how we are committed to our Service members and we look forward to making this happen."
"Fixing our income tax code so it encourages military retirees to settle in Nebraska after they leave the service is an outstanding idea,” said Senator Tom Brewer of Gordon, who will introduce the proposal. “All six neighboring states around Nebraska do a better job of this and we are missing out. There is strong bipartisan support in the legislature for this idea and I'm proud to carry a bill for the Governor so we can make Nebraska the place our veterans come back to."
“With over 250,000 Americans transitioning from military service each year, veterans recruitment is an essential component of our mission to continue developing Nebraska’s talented workforce,” said Nebraska Department of Economic Development Director Dave Rippe. “Our service men and women possess traits that translate seamlessly into what we desire most in our civilian employees, entrepreneurs, and leaders. These men and women embody strong values of leadership, teamwork, decision-making, and specialized training that are valuable assets to the Nebraska labor force, and as a state, it is essential that we position ourselves to be a destination of choice for these individuals.”