How to make the Nebraska PTET election.

Can your business elect?

Partnerships (including LLCs taxed as partnerships, but not publicly traded partnerships) and S corporations can elect, including financial institutions that file a Nebraska S corporation return. Disregarded LLCs cannot elect, though a partnership or S corporation that owns one can.

The election is binding on the entity and all its owners, and no owner opt-out was found. The tax applies to the entity's entire Nebraska-source income, including the share of non-taxpaying owners such as IRAs. Non-electing partnerships and S corporations that receive PTET credits from a lower-tier entity can claim them or pass them to their own owners.

Rate: 4.55% for tax year 2026. The rate drops to 3.99% for 2027 and after.

The entity's entire Nebraska-source income (all income if the entity operates only in Nebraska, or the apportioned amount from Schedule I if it is multistate), including guaranteed payments.

Available for 2026. Enacted by LB 754 (2023) for tax years beginning on and after January 1, 2018. The Department says the program is not tied to the federal SALT cap. New to PTET? See how the election works.

Deadlines

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: On or before the due date of the 2026 Nebraska return, including any approved extension. The return is due March 15, 2027. Partnerships get the same extension as the federal one (six months), and S corporations can get up to seven months.

Start with Form PTET-E, Pass-Through Entity Tax (PTET) Election for Tax Years After 2022 (Rev. 3-2025), from the Nebraska Department of Revenue.

1. Complete Form PTET-E, Pass-Through Entity Tax (PTET) Election for Tax Years After 2022: enter the entity's name, FEIN, Nebraska ID number, and the 2026 tax year, and check Partnership or S Corporation.
2. Have a partner or corporate officer sign it. If someone else signs, a Power of Attorney, Form 33, must be on file or attached.
3. Upload it through the Department's secure file sharing system (the Upload PTET-E Here link on the PTET page), or submit it with the return, by the return's due date including any approved extension.
4. On the 2026 Form 1065N or Form 1120-SN, check Box 5 even if Form PTET-E was already filed, and complete Schedule PTET and the Schedules K-1N.

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Paying the tax, step by step

Required for tax years after 2023 if PTET after credits is $400 or more. For a calendar-year 2026 entity, payments are due April 15, June 15, September 15, and December 15, 2026, on Form 1065N-ES (partnerships) or Form 1120N-ES (S corporations). The underpayment penalty is computed on Form 2220N.

What you need

• An account with Nebraska e-pay for the business. Set it up before the first deadline.
• The entity's Nebraska ID number.
• An e-pay password (the Nebraska ID number the first time).
• The bank routing and account numbers.

Start at Nebraska e-pay, Nebraska's official site.

1. Go to revenue.nebraska.gov, click Make a Payment Only under Businesses, click Nebraska e-pay, then click Make a Payment.
2. Log in with the Nebraska ID number as the username. First-time users enter the Nebraska ID number as the password and then must change it.
3. Select the tax type code: 02920 (Partnership Income Tax, Estimated, Form 1065N-ES) or 02100 (Corporation Income Tax, Estimated, Form 1120N-ES) for S corporations. Use 02900 or 02000 for a balance due with the return.
4. Enter the tax period end date as 12312026, the amount, the payment date, and the bank account, then click Continue and record the confirmation number. Complete it by 5:00 p.m. Central Time on the due date.
5. To pay by mail, send Form 1065N-ES or Form 1120N-ES with a check payable to the Nebraska Department of Revenue.

Filing the return: Form 1065N (partnerships) or Form 1120-SN (S corporations), with Nebraska Schedule PTET and Schedules K-1N. Due March 15, 2027 for a calendar-year 2026 entity. Payment is due by the original due date.

Claiming the credit

Owners claim a refundable credit for their share of PTET paid, as shown on Nebraska Schedule K-1N, on the return for the same tax year. Individuals use Form 1040N and estates and trusts use Form 1041N. The credit is allowed only after the entity pays the tax.

Good to know

• For an individual's underpayment penalty, the PTET credit counts as a refundable credit, not as withholding or an estimated payment.
• Nonresident owners do not need Forms 12-N when the entity elects. The entity also does not need to withhold for nonresident individuals.
• Entities that made timely elections for 2018 through 2022 must report and pay that PTET no later than their 2026 return. New elections for those years closed December 30, 2025.
• Partnerships can specially allocate the PTET credit if the allocation is valid under federal law.
• A loss year cannot reduce PTET in other years.
• Paying your personal Nebraska estimates? See how to pay Nebraska estimated taxes.
• Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Nebraska Department of Revenue's own publications and Neb. Rev. Stat. Sections 77-2727, 77-2730, 77-2734.01, and 77-2775.

• Nebraska DOR: Pass-Through Entity Tax (PTET) FAQs (updated Aug. 17, 2026)
• Nebraska DOR: Nebraska Pass-Through Entity Tax (PTET) overview
• 2025 Nebraska Return of Partnership Income booklet (Form 1065N and Schedule PTET)
• 2026 Nebraska Partnership Estimated Income Tax Payment Vouchers (Form 1065N-ES)
• Nebraska DOR Tax Calendar
• 2026 Nebraska Corporation Estimated Income Tax Payment Vouchers (Form 1120N-ES, covers electing S corporations)
• Form PTET-E, PTET Election for Tax Years After 2022 (Rev. 3-2025)
• Nebraska DOR: Nebraska e-pay
• Nebraska e-Pay User Guide (Rev. 9-2026)

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.