Tax filing season is here, and Nebraska families are once again sorting through W-2s, logging into tax software, and bracing for the familiar anxiety of figuring out what they owe. It’s never a fun process — but this year, there’s genuinely good news: because of the Working Families Tax Cuts, which I voted for last summer, you will likely keep more money in your pocket than you did last year.
For years, Nebraska families have felt the squeeze. Groceries, gas, rent, and childcare all got more expensive, while paychecks struggled to keep up. The Working Families Tax Cuts are a direct response to that pressure.
So, what does the law actually do? At its core, it makes permanent the lower tax rates established in 2017, raises the standard deduction, and increases the Child Tax Credit. Without this legislation, all those benefits would have expired — amounting to the largest tax increase in American history. By acting, Congress blocked a $4 trillion tax hike and locked in savings that show up directly when you file your return.
For Nebraska specifically, the impact is substantial. The average Nebraska family will avoid a tax hike of more than $2,400 a year. More than 868,000 Nebraska households will benefit from the expansion of the full standard deduction, which we made permanent through this law. We also increased the full Child Tax Credit to $2,200 per child, which will help more than 239,000 Nebraska families. Over 44,000 family-owned farms and business are protected from a sharp reduction in the estate tax exemption — often called the “death tax” — which could otherwise have forced families to sell land that’s been in their name for generations. And the law protects roughly 37,000 Nebraska jobs.
The law also includes new provisions that are worth knowing about. Workers who earn tips or overtime pay will now owe no federal income tax on that income. Seniors receive an additional deduction as well. This relief is real and meaningful.
One provision I’m especially proud of: the bill made permanent my Paid Family and Medical Leave Tax Credit — the first federal policy of its kind in the country, which I originally established in 2017. This credit encourages employers of all sizes to voluntarily offer paid leave to workers welcoming a newborn or caring for an aging parent, rather than through a government mandate. Making it permanent gives employers the long-term certainty they need to support employees as they care for their families without sacrificing their job or paycheck.
Tax season will never be anyone’s favorite time of year. But this year, filing your return may bring a bit of welcome relief. That’s something worth knowing as you sit down with your paperwork this season.
Thank you for participating in the democratic process. I look forward to visiting with you again next week.