Nebraska’s financial profile is shifting. The state is in the middle of a major tax reform — flattening its income tax to 3.99% by 2027 — while maintaining a strong job market centered on Omaha (Berkshire Hathaway, Mutual of Omaha, Union Pacific). The cost of living is about 10% below the national average, and Omaha’s metro has become a genuine mid-tier tech and finance hub. Lincoln, home to the University of Nebraska, offers even lower housing costs. The key financial caveat is property taxes: Nebraska’s are the 7th highest in the nation, which offsets some of the savings from cheap housing. The state works best for dual-income households in Omaha or Lincoln who can take advantage of low housing and the incoming flat tax.
Nebraska at a Glance
| Metric | Value | National Rank |
|---|---|---|
| Population (2024) | 2.0 million | 37th |
| Median household income | $71,772 | Above average |
| Median home price | $260,000 | Below average |
| Cost of living index | 90 | Below average |
| State income tax | 2.46-5.84% (declining to 3.99% flat by 2027) | Above average |
| Sales tax | 5.5% (+ local up to 2%) | Average |
| Property tax (effective rate) | 1.63% | High |
Income and Housing
| City/Area | Median Income | Median Home Price | Median Rent (2BR) |
|---|---|---|---|
| Omaha | $68,000 | $280,000 | $1,150 |
| Lincoln | $65,000 | $275,000 | $1,050 |
| Grand Island | $58,000 | $210,000 | $900 |
| Kearney | $60,000 | $230,000 | $950 |
| North Platte | $55,000 | $190,000 | $800 |
Tax Transition
Nebraska is reducing its income tax to a flat 3.99% by 2027. Current rates (2025):
| Taxable Income (Single) | Rate |
|---|---|
| Up to $3,700 | 2.46% |
| $3,701-$22,170 | 3.51% |
| $22,171-$35,730 | 5.01% |
| Over $35,730 | 5.84% |
Property tax caution: Nebraska has the 7th highest property tax rate (1.63%), partially offsetting low housing costs.
Nebraska Pros and Cons
| Financial Pros | Financial Cons |
|---|---|
| 10% below national COL | High property taxes (1.63%) |
| Very low unemployment (<3%) | Current income tax above average |
| Affordable housing (<$300K Omaha) | Cold winters, heating costs |
| Fortune 500 HQs (Berkshire Hathaway, Mutual of Omaha) | Limited metro areas |
| Income tax declining to flat 3.99% | Small-city amenities |
Related: Cost of Living by State | State Income Tax Rates | Property Tax by State