Nebraska taxpayers are missing out on a significant sum—more than $400 million in unclaimed property tax credits since Tax Year 2020. This revelation, brought to light by an investigation, has sparked concerns among state officials and policymakers.

The property tax credit system, approved by lawmakers in 2020, was designed to provide homeowners with relief by offering credits against their state income taxes for the property taxes paid at the local level. However, despite the availability of these credits, a large portion remains unclaimed.

According to data from the Department of Revenue, the unclaimed amount has steadily increased over the years, with Tax Year 2022 recording $213.5 million left unclaimed out of a total possible credit of $763 million. This substantial sum underscores the need for greater awareness and outreach regarding the availability of these credits.

One of the key concerns highlighted by officials is the disparity in the rate of credits claimed across different school districts. For instance, some of the largest districts in Nebraska, such as Omaha and Grand Island, have unclaimed rates as high as 67% and 60%, respectively. This variance suggests a potential urban-rural divide in awareness and understanding of the credit program.

Rebecca Firestone, executive director of OpenSky Policy, emphasized the importance of ensuring that taxpayers have access to information and support to claim their credits. She noted that while the process may seem straightforward, many individuals may not be aware of the credits or how to claim them, particularly if they do not have access to professional tax preparation services.

State Senator Lou Ann Linehan raised concerns about the current system, highlighting that the credits may only benefit those who itemize deductions and are aware of their existence. Linehan proposed legislative measures to address the issue, including additional funding for property tax relief and improved outreach efforts.

Despite the challenges, there is hope for those who have missed out on claiming credits in previous years. Taxpayers have the option to file amendments to claim unclaimed credits, providing an opportunity to recoup potentially significant sums.

As the investigation sheds light on the substantial amount of unclaimed property tax credits in Nebraska, efforts are underway to improve awareness and accessibility to ensure that all eligible taxpayers can benefit from this essential relief measure.