Moving from Canada to Nebraska: A Falling Top Rate, High Property Tax, and the Omaha Fortune 500 Cluster

Omaha is home to Berkshire Hathaway, Union Pacific, Mutual of Omaha, Kiewit, and a large insurance and financial services sector, and Lincoln has the state government and the University of Nebraska. Canadians arrive through finance, insurance, engineering, and agribusiness. Nebraska's tax picture is a graduated income tax whose top rate is stepping down toward 3.99%, high property tax, moderate sales tax, no estate tax, and a county inheritance tax.

Key takeaways

• Nebraska's top income tax rate is 4.55% for 2026 and scheduled to fall to 3.99% in 2027. No city income tax.
• Combined sales tax runs about 7% to 7.5% in Omaha and Lincoln.
• Property tax is among the highest in the US, near 1.6% effective.
• No estate tax, but Nebraska counties levy an inheritance tax (1% on transfers to children above an exemption, higher on more distant heirs).
• Nebraska starts from federal AGI and fully exempts Social Security.

The Canadian departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the day you leave. Canadian real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 to defer tax on illiquid assets. The rate is your province's: on a $300,000 unrealized gain, roughly $72,000 from Alberta and $80,000 from Ontario, Quebec, or BC. Provincial health coverage ends around your departure date; confirm the exact date with your plan and arrange US coverage to start the same month.

US federal side

Dual-status return in the arrival year, FBAR on Canadian accounts above $10,000 aggregate, Form 8938 above thresholds, and the RRSP treaty deferral federally. The TFSA loses its tax-free status the day you become a US person; close it before crossing. Equity compensation vesting after the move is split by working days between Canada and the US.

Nebraska's side

Graduated income tax with a top rate of 4.55% for 2026, stepping down to 3.99% in 2027; no city income tax; 5.5% state sales tax plus local, about 7% in Omaha and 7.25% in Lincoln; property tax near 1.6% effective with a homestead exemption limited to lower-income seniors; no estate tax, but a county-level inheritance tax of 1% on transfers to children and other lineal heirs above a $100,000 exemption, 11% to siblings and other relatives, and 15% to unrelated beneficiaries. Nebraska starts from federal AGI and fully exempts Social Security.

The RRSP

Federally deferred under Article XVIII of the treaty and deferred for Nebraska because the state starts from federal AGI. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, a US foreign tax credit federally, and Nebraska's graduated rates. CPP and OAS, treated like Social Security under the treaty, are exempt from Nebraska tax.

Who makes this move

Canadian finance and insurance professionals to Berkshire Hathaway's subsidiaries, Mutual of Omaha, and Omaha's financial services sector, Canadian engineers to Kiewit and Union Pacific, Manitoba and Saskatchewan agribusiness professionals to Nebraska's food and equipment companies, and Canadian academics to the University of Nebraska.

Worked example

A Toronto insurance actuary moves to Omaha on June 30 with $200,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, and a Toronto condo sold in the departure year.

• Departure tax. $200,000 gain, $100,000 taxable, at about 53.5%: roughly $53,500.
• Condo. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; federal and Nebraska deferral.
• Omaha. Combined top rate about 41.6%. HST 13% becomes sales tax 7%. Property tax on a $450,000 home around $7,200.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

"Jan. 1, 2026 — Rate By Bracket Number: 2.46%, 3.51%, 4.55%, 4.55%." — Nebraska Department of Revenue, Nebraska Tax Rate Chronologies, Table 1 — Income Tax and Sales Tax Rates, https://revenue.nebraska.gov/sites/default/files/doc/research/chronology/4-607table1.pdf

"You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that." — Internal Revenue Service, Substantial Presence Test, https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

Practitioner note

Nebraska's property tax is the line item Canadians do not expect, and the county inheritance tax is one almost none have heard of: a transfer to children above $100,000 is taxed at 1% by the county, and transfers to more distant heirs at 11% or 15%. Neither exists in Canada.

See also: Weighing Florida instead? See the Canada-to-Florida guide. Browse every corridor by city, province, and state.

Next step

Fairlight prepares the Canadian departure return, the first-year federal and state returns, and ongoing cross-border filings. See cross-border pricing or book a call.