Nebraska requires corporations and pass-through entities doing business or deriving income from the state to file annual tax returns. C corporations must submit Form 1120N and pay corporate income tax. They are also responsible for estimated tax payments if their liability exceeds USD 400. S corporations and partnerships, including LLCs and LLPs, have similar obligations, with income flowing through to owners but filing duties still applying at the entity level.
This blog explores Nebraska’s corporate and pass-through entity taxation system, including due dates, filing requirements, penalties, interest, and extensions.
C Corporation Tax
C corporations operating in Nebraska are required to file the Nebraska Corporate Income Tax Return – Form 1120N if they derive income from Nebraska sources or are incorporated in the state. Supporting schedules and documentation may be needed as per the Nebraska Department of Revenue.
Due Date:
- The corporate income tax return is due on or before the 15th day of the fourth month following the close of the tax year.
Estimated Tax Payments:
- Corporations must make estimated payments if their expected liability, after allowable credits, exceeds USD 400.
- Payments are made quarterly using Form 1120N-ES – Nebraska Corporate Estimated Income Tax.
Extension:
- Nebraska permits an automatic six-month extension by filing Form 7004 – Application for Automatic Extension of Time to File Corporation, Partnership, and Other Returns with the IRS.
- The extension covers only filing, not tax payment obligations.
Penalties and Interest:
- Late filing incurs a penalty of 5% per month, up to 25%.
- Unpaid taxes accrue interest at 5% annually from the original due date until fully paid.
S Corporation Tax
S corporations in Nebraska must file the Nebraska S Corporation Income Tax Return – Form 1120S, including required schedules and documentation. This obligation applies if the entity earns Nebraska-source income or is incorporated in the state.
Due Date:
- Returns are due by the 15th day of the third month following the close of the tax year.
Extension:
- Filing Form 7004 with the IRS also secures a six-month extension for Nebraska returns.
- The extension does not cover payments, which must be made by the original deadline.
Estimated Tax Payments:
- S corporations must make estimated tax payments if liability is expected to exceed USD 400.
- Quarterly installments are due on April 15, June 15, September 15, and December 15.
- Payments are made using Form 1120N-ES.
Penalties and Interest:
- The rules for penalties and interest mirror those for C corporations:
- 5% per month for late filing (up to 25%).
- 5% annual interest on unpaid balances.
Partnership LLC & LLP Tax
Nebraska partnerships, LLPs, and LLCs with two or more members must file the Nebraska Partnership Return of Income – Form 1065N each year to report income, deductions, and credits.
Informational Filing:
- The filing is informational, as income flows through to members or partners, who must report it individually.
- Members file Form 1040N – Individual Income Tax Return to declare their share.
Due Date:
- Partnership returns are due by the 15th day of the third month after the close of the entity’s tax year.
Extension:
- An automatic six-month extension can be obtained by filing Form 7004.
- This extends only the filing deadline, not the payment date.
Estimated Tax Payments:
- Partners or members must make estimated payments if annual liability exceeds USD 500.
- Payments are made quarterly using Form 1120N-ES.
Penalties and Interest:
- Late filing results in a penalty of 5% per month, capped at 25%.
- Unpaid taxes accrue 5% annual interest from the original due date.
Conclusion
Nebraska’s taxation system ensures compliance across corporations and pass-through entities.
Key takeaways:
- C corporations: Must file Form 1120N, pay taxes by the 15th day of the fourth month, and make quarterly estimated payments if liability exceeds USD 400.
- S corporations: File Form 1120S, with returns due on the 15th day of the third month. Estimated payments are required if liability exceeds USD 400.
- Partnerships, LLCs, LLPs: File Form 1065N for informational purposes, with members reporting income on Form 1040N. Estimated payments apply if liability exceeds USD 500.
Across all entities, penalties of up to 25% for late filing and 5% annual interest on unpaid balances emphasize the importance of compliance. Extensions provide extra time for filing but not for payment.
By meeting deadlines, monitoring liability thresholds, and making timely estimated payments, businesses and individuals in Nebraska can avoid penalties and maintain smooth tax compliance.
