Phillip S. Oman, CPA
Manager
Nebraska’s 2025 ImagiNE Incentive Act is making it easier than ever for manufacturing businesses to invest in new jobs and facilities while taking advantage of generous tax credits. Whether you’re in a rural county or an urban hub, the program rewards growth, innovation, and job creation—helping your business thrive and Nebraska’s economy flourish.
What Businesses Qualify for ImagiNE Nebraska
While several industries qualify under the program, this article focuses on manufacturing businesses, the sector with the most applications. Other eligible industries include testing laboratories, rail and truck transportation, data processing, computer systems design, warehousing, and renewable energy production.
For manufacturing businesses, the two main application types are:
- Manufacturing Growth and Expansion (Rural)
- Manufacturing Growth and Expansion (Urban)
Manufacturing Growth and Expansion Application Levels
To qualify for ImagiNE Nebraska tax credits, businesses must plan for growth through both workforce expansion and capital investment.
Rural Manufacturing Growth and Expansion
| Qualification | Requirement |
| Job Growth | 5 Full-Time Employees (FTEs) |
| Investment | $1 million minimum |
| Wage Threshold | 70% of Nebraska Average Wage (~$19.92/hour) |
| Location | Counties with population <100,000 |
| Business Activity | Manufacturing (NAICS 31-33) |
Benefits
| Credit | Details |
| Wage Credit | 6% of the average wage of new employees |
| Bonus Wage Credit | +1% if Benefit Corporation; +1% if in an extremely blighted area |
| Investment Tax Credit | 4% (7% if investment ≥ $10 million) |
| Bonus Investment Credit | +1% if Benefit Corporation; +1% if in extremely blighted area |
Urban Manufacturing Growth and Expansion
| Qualification | Requirement |
| Job Growth | 10 Full-Time Employees (FTEs) |
| Investment | $1 million minimum |
| Wage Threshold | 75% of Nebraska Average Wage (~$21.34/hour) |
| Location | Counties with population ≥100,000 |
| Business Activity | Manufacturing (NAICS 31-33) |
Benefits
| Credit | Details |
| Wage Credit | 4% of the average wage of new employees |
| Investment Tax Credit | 4% (7% if investment ≥ $10 million) |
Bonus credits for Benefit Corporations or blighted areas apply similarly to Rural applications.
Application Periods and Using Tax Credits
Once the base-year employment data and application requirements are met, businesses can begin using the credits across three stages:
1. Ramp-Up Period (Up to 5 Years)
- The business has up to 5 years to meet minimum FTE and investment thresholds.
- If thresholds are not met, no credits will be awarded.
2. Performance Period (7 Years)
- Begins immediately after thresholds are achieved.
- Wage credits can offset Nebraska income tax and withholding.
- Investment credits offset Nebraska income tax.
3. Carryover Period (3 Years)
- Any unused credits from the Performance Period can be carried forward for up to 3 years before expiring.
Compliance and Other Considerations
Businesses applying for ImagiNE Nebraska credits must also:
- Pay a $5,000 non-refundable application fee.
- Offer health insurance to all new full-time employees.
- Abide by state anti-discrimination laws.
What’s New in 2025
- Updated Wage Thresholds: Reflect the 2025 Nebraska Average Wage of $28.45/hour (100%).
- Simplified Application Process: Online submission with clearer guidelines for manufacturing businesses.
- Enhanced Bonuses: Targeted to encourage investment in blighted areas and Benefit Corporations.
Take Action
Nebraska’s ImagiNE Incentive provides a powerful tool for manufacturing businesses looking to grow in 2025. Companies interested in applying should contact the Nebraska Department of Economic Development. While these state tax incentives can be extremely beneficial to the growth of a business, the application process and information required each year may deter some businesses from pursuing the credits they are entitled to receive. At HBE, our team of trusted advisors are dedicated to helping your business maximize all applicable tax credits. Contact us today to learn how we can support your businesses’s growth and expansion.
