VRBO Host Taxes in Nebraska - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for VRBO Hosts in Nebraska

From the Sandhills to the Missouri River, Nebraska’s hospitality is attracting more visitors, and many property owners are opening their doors to travelers through platforms like VRBO. Rental income generated through these platforms is generally taxable at both the federal and Nebraska state levels. Understanding these tax obligations is crucial for compliance and maximizing potential deductions.

Nebraska State Tax Rules for Rental Income

As a resident of Nebraska, a state income tax return is required regardless of the amount of rental income earned. Nebraska utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, Nebraska’s income tax rates are expected to remain consistent with prior years, ranging from 2.64% to 6.84% based on income brackets. Rental income is reported as part of your overall adjusted gross income. The primary form used to report self-employment income, including rental income reported on Schedule E or C, is Nebraska Form 1040N, with supporting schedules as needed.

Nebraska also has a provision for a standard deduction, which can reduce your taxable income. The amount of the standard deduction varies based on filing status. Furthermore, Nebraska allows itemized deductions similar to the federal level, including mortgage interest and property taxes (subject to limitations). It’s important to note that Nebraska’s tax laws often mirror federal laws, but there can be differences, particularly regarding deductions and credits. Keep meticulous records of all rental income and expenses to accurately calculate your Nebraska state tax liability. For detailed information and the latest updates, refer to the Nebraska Department of Revenue: Nebraska Department of Revenue.

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for a VRBO host, as it determines if you owe self-employment tax. The IRS classifies rental activities differently, impacting your tax obligations.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Think of it as simply providing a space for rent.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries beyond basic soap, concierge services), you report on Schedule C and must pay the 15.3% self-employment tax. This is because the IRS considers it an active business, not just a rental.

Top Tax Write-offs for Nebraska Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These are considered expenses directly related to generating rental income.
• Mortgage Interest & Property Taxes: Deduct the portion of mortgage interest and property taxes corresponding to the rental space and the period it was rented. If the property is used for both personal and rental purposes, you must allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (leaky faucets, broken appliances), professional cleaning, and cleaning supplies. Routine maintenance is deductible; improvements that increase the property's value are generally depreciated.
• Depreciation: A powerful but complex deduction for wear and tear on your property. This allows you to deduct a portion of the property's cost over its useful life. Often requires a tax professional to calculate correctly.