Starting July 1, 2026, Nebraska businesses that owe more than $5,000 a year in a given tax type must pay that tax electronically. The change comes from Nebraska Revised Statute § 77-1784, and it applies across most state business tax programs involving sales and use tax, withholding, and others. If your business is still cutting a check to the Nebraska Department of Revenue, it’s worth reading on.
What changed?
Nebraska has moved from encouraging electronic payments to requiring them once a business crosses the $5,000 annual threshold for a specific tax type. That threshold applies per tax program, not per business overall. So a company might have to pay withholding tax electronically while still mailing a check for a smaller obligation in a different category.
The mandate does not apply to individual income tax.
This isn’t a brand-new concept for Nebraska. The $5,000 electronic payment threshold has been on the books since 2017. What’s new for 2026 is that withholding tax is now swept into the same rolling test. If an employer’s total withholding payments topped $5,000 in 2025, all withholding payments must go electronic starting July 1, 2026, and the state re-checks the prior year’s total every year after that.
How does Nebraska’s threshold compare to other states?
Nebraska isn’t an outlier. Rhode Island uses the same $5,000 combined annual liability figure to trigger its own electronic payment mandate. Other states set the bar much higher. California only requires electronic payment once an S corporation’s total tax liability (including the pass-through entity elective tax) exceeds $80,000 or a single estimated or extension payment tops $20,000. Where a business’s Nebraska tax bill falls relative to numbers like these is a useful gauge of how quickly a state mandate is likely to catch up with it.
What happens if you don’t comply?
Nebraska can assess a $100 penalty for each instance a required payment isn’t made electronically. That penalty applies per occurrence, so a business that continues paying by check on a recurring basis (monthly withholding deposits, for example) could rack up repeated penalties rather than a single flat fee.
How do you set up electronic payments?
Nebraska offers a few ways to pay electronically, including the state’s e-pay portal and ACH debit or credit options through the Department of Revenue. Setup typically requires basic banking information and can take a few business days to activate, so businesses near the threshold shouldn’t wait until a payment is due to get enrolled.
What should business owners do now?
Two things, ideally this week: review how much you paid in each Nebraska business tax category last year, and check how you’re currently submitting those payments. If any category topped $5,000 and you’re still paying by check, get electronic payment set up before your next filing deadline.
This is a compliance change, not a tax increase. The amount owed doesn’t change, only how it has to be paid. But the penalty adds up quickly for businesses that miss it, especially those with recurring monthly obligations like withholding.
There’s a fraud angle worth weighing too. In the AFP’s 2025 Payments Fraud and Control Survey, 63% of organizations reported attempted or actual check fraud in 2024, more than any other payment method, even though 91% of respondents said they still write checks regularly. Moving recurring state tax payments to ACH takes one more paper check out of circulation, mandate aside.
If you’re not sure whether your business meets the threshold, or you need help getting set up with electronic payments, talk to your accountant before your next Nebraska filing is due.
This article is for general information and isn’t a substitute for advice specific to your situation. Contact one of our MBE CPAs office locations with questions about how this applies to your business.