100% Neb Income Tax Exemption On Military Retirement Pay Advances Posted by John Axtell Date: March 11, 2021 143 Views Military retirees in Nebraska are one step closer to getting a full tax exemption on their retirement pay instead of the current 50% exemption. A bill with 100% exemption received unanimous first-round approval on Wednesday.. The measure is one of Gov. Pete Ricketts’ top priorities this year and is sponsored by State Senator Tom Brewer of Gordon, described at his retirement from the military as the most-decorated soldier in the history of the Nebraska Army National Guard. Brewer told his fellow lawmakers during floor debate that not only would the bill benefit career military retirees, it would help Nebraska keep and attract military installations. Brewer and other supporters say the 100% tax exemption will help Nebraska by encouraging highly trained, career military members to stay in the state when they retire instead of moving to states that don’t tax their retirement pay. Backers say many military retirees use their experience, training, and security clearances to get other, higher-paying jobs after they leave the service – jobs that would help the Nebraska economy. . The primary objection by critics is that the measure will divert $13-million dollars away from priorities such as lowering property taxes. About 13,000 military retirees would benefit, including Senator Brewer.