How did expired Nebraska GIL 29-20-2 count remote, ready-to-work, reduced-hour, and furloughed workers during the COVID-19 emergency?

Plain-English summary

This temporary guidance let certain pandemic-displaced and paid employees continue counting toward Nebraska Advantage Act employment levels. It expired July 30, 2021.

Employees who worked at the project before March 13, 2020 continued to be treated as working there while temporarily working from home or another location. A worker hired afterward could be treated as working at the project from the hire date if the worker began work at the project location by the GIL's expiration.

During the effective period, incentive companies tracked those hours as project work regardless of the temporary work location. The GIL also treated the employees as having Nebraska-source income and directed employers to continue or begin Nebraska withholding.

Paid leave, reduced hours, and furloughs

Hours paid to employees temporarily placed on ready-to-work status counted like vacation or sick leave because the absence was temporary and tied to the emergency.

Reduced hours continued to count when the employee received the required weekly wage and otherwise met the stated requirements. Employer-paid wages subject to federal Medicare tax counted even when federally subsidized.

Furloughed workers who received benefits rather than wages did not count because they failed the weekly-wage requirement.

Salaried employees and expiration

For projects applied for on or after September 6, 2013, full-time salaried employees were deemed to work 40 hours per week under Neb. Rev. Stat. § 77-5709. For older projects, Revenue Ruling 29-05-4 used the regular workweek for full-time hourly employees; temporary pandemic conditions did not change the employer's established policy.

The official expiration notice states that the GIL ended July 30, 2021. After that date, employees had to work at the project or qualify as teleworkers under Neb. Rev. Stat. § 77-5714(3), employers had to resume tracking work location, and multistate payroll withholding had to be reviewed under the ordinary rules.

Common questions

Q: Is GIL 29-20-2 still in effect?

A: No. The Department's official notice says it expired July 30, 2021.

Q: Did temporary work from home prevent an existing project employee from counting?

A: Not during the GIL's effective period when the employee had worked at the project before March 13, 2020.

Q: Did paid ready-to-work time count?

A: Yes. The GIL treated it like temporary vacation or sick leave.

Q: Did furlough benefits count as wages?

A: No. Workers receiving benefits but not wages did not meet the required weekly wage.

Q: Were remote employees treated as having Nebraska-source income during the temporary period?

A: Yes. The GIL directed Nebraska withholding during its effective period.

Citations and references

• Neb. Rev. Stat. § 77-5709 — deemed hours for specified full-time salaried employees
• Neb. Rev. Stat. § 77-5714(3) — teleworker rule referenced for periods after expiration
• Nebraska Revenue Ruling 29-05-4 — salaried-employee hours for older projects
• Nebraska GIL 29-20-2 — temporary COVID-19 employment-count rules
• Official Notice of Expiration — GIL expired July 30, 2021

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/general-information-letters-gils
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/gil/GIL29-20-2_Remote_Working.pdf
• Expiration notice: Notice of the Expiration of GIL 29-20-2

Original ruling text

GIL 29-20-2 Tax Incentives: Treatment of Alternative Employment
Arrangements Due to the COVID-19 National Emergency for Purposes of
Calculating Employment Levels Under the Nebraska Advantage Act
This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (DOR)
until amended. A guidance document does not include internal procedural documents that only affect the
internal operations of DOR and does not impose additional requirements or penalties on regulated parties
or include confidential information or rules and regulations made in accordance with the Administrative
Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on
regulated parties, you may request a review of the document.
This guidance document may change with updated information or added examples. DOR recommends you
do not print this document. Instead, sign up for the subscription service at revenue.nebraska.gov to get
updates on your topics of interest.

Dear XXXX,

IR
ED

May 28, 2020
You have asked how DOR will treat various alternative employment arrangements, made necessary
by the COVID-19 state of emergency and related directed health measures, for purposes of
calculating the number of new employees under the Nebraska Advantage Act (Act). Because of the
nature of the question asked, we are providing this General Information Letter (GIL) in response.

EX
P

GILs address general questions; provide analysis of issues; and direct taxpayers to the Nebraska
statutes, DOR regulations, revenue rulings, or other sources of information to help answer a
question. A GIL is a statement of current DOR policy, and taxpayers may rely on DOR to follow
the principles or procedures described in a GIL until it is rescinded or superseded. You may also
find current regulations, revenue rulings, information guides, taxpayer rulings, and other GILs that
may be helpful to you at revenue.nebraska.gov.
On March 13, 2020, Governor Pete Ricketts declared a state of emergency due to the COVID-19
pandemic. To slow the spread of the virus, the Governor issued several directed health measures
and asked Nebraskans to practice social distancing. To protect the health of their employees and
community, many businesses have chosen to utilize alternative employment arrangements for
some or all of their workers. Some of the alternative employment arrangements involve employees
working from home, working reduced hours, or being paid to stand ready-to-work. However,
under the Act, the number of new employees is calculated based upon the number of hours worked
at the project. This GIL will address how DOR will treat each of these alternative employment
arrangements for purposes of calculating the number of new employees under the Act during
the pandemic.
Many employers have arranged for some or all of their employees to work remotely. Because
of the large increase in the number of employees temporarily working at alternative work-sites,
it will be difficult for employers to keep track of the number of hours worked at the project and
even more difficult for DOR to verify the number of hours worked there. For the entire period this
GIL is applicable, DOR will not require employers to track the location of workers displaced by
the pandemic, and will consider all employees who worked at the project prior to March 13, 2020
as continuing to work at that location, even though the employer has allowed or required the
employees to temporarily work from home or an alternate location. Employees who are hired after
March 13, 2020, who work from home or an alternative site, and begin work at the project location

GIL 29-20-2

Page 2 of 2

by the date this GIL expires, will be considered to have worked at the project since their date of
hire. In both circumstances, employers should continue to withhold, or commence withholding, for
Nebraska income tax. The employees are considered to have Nebraska source income throughout
the period that this GIL applies. Incentive companies should track employee hours as though
these employees are performing work at the project while this GIL is applicable, regardless of the
location from which the employees are working.
Some employers have asked workers to temporarily not return to work and have continued to pay
them to stand ready to return to work when called. The hours of employees temporarily placed on
ready-to-work status due to the COVID-19 state of emergency will be treated similarly to vacation
or sick leave because the absence is temporary and limited to the emergency. These hours will be
considered leave time used and will count toward the calculation of the number of new employees.

IR
ED

Other employees may continue to work at the project for a reduced or subsidized rate of pay. The
calculation of the number of new employees includes hours paid at or above the required weekly
wage. The hours of employees who are not base year employees, who are properly E-Verified,
and who are paid the required weekly wage will continue to count toward the number of new
employees. Wages include all payments for work at the project that are subject to the federal
Medicare tax. Wages paid by the employer that are subject to the federal Medicare tax count
towards the required weekly wage even though they are subsidized by the federal government.
Furloughed workers who are paid benefits, but not wages, cannot be included in the calculation of
the number of new employees because they do not meet the required weekly wage.

EX
P

The hours of employees working reduced hours will continue to count toward the employee
calculation as long as they receive the required weekly wage. The reduction in hours worked
by full-time hourly employees will not affect the number of hours attributed to any full-time
salaried employees. For projects with an application date on or after September 6, 2013, full-time
salaried employees are deemed to have worked 40 hours per week as provided in Neb. Rev. Stat.
§ 77-5709. For projects with an application date before September 6, 2013, the hours of full-time
salaried workers are calculated pursuant to Revenue Ruling 29-05-4. That ruling states that a
full-time salaried employee “will be treated as having worked the number of hours established
as the regular workweek for full-time hourly employees.” DOR has determined that the regular
workweek is established by the employer’s policies, and not by temporary conditions or events.
The COVID-19 emergency is temporary and does not affect the employer’s policies. The number
of hours established as the regular work week for full-time hourly employees remains the number
of hours established by the business before the COVID-19 emergency.
This GIL applies to tracking hours and calculating the number of new employees for the period
commencing on March 13, 2020 and continuing until January 1, 2021 or 30 days after the end of
the declared emergency, whichever is later. This GIL does not change the requirements for tracking
hours or calculating the number of new employees for any other period of time.
For the Tax Commissioner
Sincerely,

                        Elizabeth Gau
                        Attorney, Policy Section
                        Nebraska Department of Revenue