NE LB851

Amends sections 77-2716 and 77-2734.01 of Nebraska's tax code to change how income or loss from S-corporations and LLCs is treated for state income tax purposes

For taxable years beginning before January 1, 2026, income or loss from S-corporations and LLCs not derived from Nebraska sources could be excluded from Nebraska taxable income

For taxable years beginning on or after January 1, 2026, Nebraska residents must include their full proportionate share of S-corporation or LLC federal income in Nebraska taxable income, regardless of whether the income is connected to Nebraska sources

Removes the source-based exclusion that previously allowed residents to exclude out-of-state S-corporation and LLC income from their Nebraska tax calculation

Repeals the original versions of sections 77-2716 and 77-2734.01 from the Revised Statutes Supplement, 2025