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Live in Nebraska, Work in Kansas: Which State Taxes Your Paycheck?

Both states — credit offsets the double taxKansas withholds

Answer

Kansas withholds and Nebraska credits. Without an agreement between them, both states are entitled to tax income earned in Kansas by a Nebraska resident. The mechanism that stops you paying twice is the credit on the Nebraska resident return, which is why the Kansas return has to be completed first.

Last verified

Without an agreement between Nebraska and Kansas, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Kansas figure is an input to the Nebraska return, so completing Nebraska first means doing it twice.

A Nebraska resident taxed by another state on the same income claims the credit for taxes paid to other states on Form 1040N Schedule II. The credit is capped at the Nebraska tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.

What you file

  1. 1Nonresident return · KansasForm K-40 with Schedule S Part B

    File the Kansas nonresident return FIRST — you need the Kansas tax figure before you can complete Nebraska.

  2. 2Resident return · NebraskaForm 1040N Schedule II

    File a Nebraska resident return reporting all income, then claim the credit for tax paid to Kansas. The credit is capped at what Nebraska would have charged on that same income, so if Kansas taxes it at a higher rate the difference is not refunded.

The two states, side by side

 NebraskaKansas
Taxes wagesYes — graduatedYes — graduated
Reciprocity partnersNoneNone
Convenience ruleYes — general ruleNo
Nonresident returnForm 1040N with Schedule IIIForm K-40 with Schedule S Part B
Credit for other-state taxForm 1040N Schedule IIForm K-40 (credit for taxes paid to other states)
Nonresident safe harbourNone publishedNone published
Local income taxNoNo
Revenue departmentNebraska Department of RevenueKansas Department of Revenue
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Kansas and working in Nebraska gives:Both states — credit offsets the double tax.

Kansas to Nebraska →

Same two states, different situation

The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.

Other Nebraska pairs

Questions people actually ask

I live in Nebraska and work in Kansas. Which state takes the tax out of my paycheck?

Kansas withholds and Nebraska credits. Without an agreement between them, both states are entitled to tax income earned in Kansas by a Nebraska resident. The mechanism that stops you paying twice is the credit on the Nebraska resident return, which is why the Kansas return has to be completed first.

Which state should my employer be withholding for?

Kansas. The wages are sourced to Kansas, so Kansas withholding is correct and there is no Nebraska withholding to set up.

Will I end up paying tax twice on the same income?

Not twice over, but you will pay the higher of the two rates. Nebraska gives residents a credit for tax paid to Kansas on the same income, claimed on Form 1040N Schedule II. The credit is capped at the Nebraska tax on that income, so if Kansas taxes it more heavily the excess is not refunded by either state.

How current is this?

The Nebraska and Kansas rules on this page were last checked against Nebraska Department of Revenue and Kansas Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.

Sources

Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.