Nebraska Inheritance Tax Worksheet: How to Complete Form PCIT

Filing the Nebraska inheritance tax worksheet is one of the tasks executors dread most — not because the math is complicated, but because getting it wrong triggers 14% annual interest and up to 25% in penalties. The worksheet (Form PCIT) is the document the County Attorney reviews before the court can issue a final tax determination, and it must account for every asset the deceased owned, including non-probate transfers that families often forget are taxable.

What the Worksheet Covers

The inheritance tax worksheet is a comprehensive accounting of the deceased's assets, the value each beneficiary receives, and the deductions that reduce the taxable amount. It covers:

• All probate assets (solely owned bank accounts, personal property, real estate without survivorship)
• All non-probate assets (joint accounts, TOD deeds, POD accounts, life insurance payable to the estate, retirement accounts)
• Each beneficiary's relationship class (Class 1, 2, or 3) and their applicable exemption
• Allowable deductions

Nebraska taxes transfers to beneficiaries, not the estate itself. That means the worksheet breaks down every asset by who receives it and calculates each beneficiary's tax separately based on their relationship to the deceased.

Gathering the Information You Need

Before sitting down with the form, you need several pieces of documentation:

Asset valuations as of the date of death. Bank statements from the month of death showing exact balances. Brokerage account statements. For real estate, the assessed value from the county assessment rolls (not a market appraisal — Nebraska uses assessed roll value for inheritance tax purposes on real property). For vehicles, the fair market value.

Beneficiary information. The full name of every person receiving assets, their relationship to the deceased, and the specific assets or dollar amounts they receive. This includes people receiving non-probate assets like TOD deed beneficiaries and POD account holders.

Deduction documentation. Paid funeral and burial invoices. Attorney fees and court costs. Medical bills from the last illness within six months of death. Outstanding debts the deceased owed. Federal estate tax payments if applicable.

Completing the Worksheet Step by Step

List every asset and its value. Include both probate and non-probate property. Joint accounts with right of survivorship, TOD deeds, POD accounts, and beneficiary-designated retirement accounts all go on the worksheet even though they bypass probate court.

Assign each asset to its recipient. For assets passing through the will, follow the will's instructions. For intestate estates, follow Nebraska's succession rules. For non-probate assets, list the designated beneficiary.

Calculate deductions. Funeral expenses, administration costs, last illness medical bills, valid debts, and federal estate taxes are subtracted from the gross estate before calculating tax. These deductions are allocated proportionally across beneficiaries.

Apply exemptions by class. Surviving spouses are fully exempt. Class 1 beneficiaries (parents, children, siblings, grandchildren) get a $100,000 exemption each. Class 2 (aunts, uncles, nieces, nephews) get $40,000. Class 3 (everyone else) gets $25,000.

Calculate tax owed per beneficiary. Multiply the amount above each beneficiary's exemption by their applicable rate: 1% for Class 1, 11% for Class 2, 15% for Class 3.

Getting County Attorney Approval

The completed worksheet goes to the County Attorney in the county where the deceased resided. The County Attorney reviews the asset valuations, confirms the relationship classifications, and checks the math. If everything looks correct, they sign the worksheet and waive their right to formal notice of the court hearing.

This sign-off is important because it streamlines what happens next. Without the County Attorney's approval, the court hearing process takes longer and may require additional documentation or testimony about asset values.

If the County Attorney disagrees with a valuation — particularly on real estate or business interests — they may request an independent appraisal or additional documentation before signing.

Filing with the Court and Payment

Once the County Attorney signs off, the worksheet is filed with the county court as part of a petition for determination of inheritance tax. The court reviews it and issues an order determining the tax amount.

Payment goes to the County Treasurer. The absolute deadline is 12 months from the date of death. After that, interest accrues at 14% per year and a 5% monthly penalty applies, capped at 25% total.

One detail families miss: if the deceased received Medicaid benefits, the petitioner must also mail a formal notice to the DHHS Medicaid Estate Recovery unit using Form CC 15:5 when filing the inheritance tax petition. Skipping this can create complications with the court accepting the final determination.

Common Mistakes to Avoid

Forgetting non-probate assets. A Transfer on Death Deed or POD bank account still gets taxed even though it never went through probate court. Leaving these off the worksheet creates liability exposure for the executor.

Using market value instead of assessed value for real estate. Nebraska statute requires assessed roll value for real property on the inheritance tax worksheet, not a current market appraisal. Assessed values are typically lower, which works in the estate's favor.

Missing the deadline. The 12-month window from date of death is firm. Even if probate is still ongoing, the inheritance tax needs to be filed and paid separately.

The Nebraska Estate Settlement Guide includes a pre-filled worksheet walkthrough and the complete sequence of filings needed to clear the inheritance tax and close the estate.

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