I see that the Federal Schedule A, Itemized Deductions, allows me to deduct either state income or sales taxes. How do I handle this on the Nebraska return?
For tax years 2005 and forward, Nebraska law continues to require that any state income tax deducted on line 5 of the Federal Schedule A be included as an addition to income on line 8 of Nebraska Form 1040N. If instead, you deducted your sales tax paid during 2007 on line 5 of Federal Schedule A, then you should enter -0- on line 8 of Form 1040N.