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Companies to share portion of tax cuts with employees

Companies to share portion of tax cuts with employees

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At least two Nebraska companies are planning to use their expected windfall from tax cuts to pay bonuses to employees.

Nelnet said Thursday that it will give nearly all of its 4,100 employees — about 2,500 of whom work in Lincoln — a $1,000 bonus in their Dec. 29 paycheck.

Pinnacle Bank also said it plans to give $1,000 bonuses to all of its full-time employees in Nebraska, Kansas and Missouri.

Both companies said the bonuses are the result of the recently passed congressional tax bill. In Nelnet's case, it will benefit from a reduction in the corporate tax rate from 35 percent to 21 percent.

Pinnacle Bank, which is organized as an S Corporation, benefits from a different provision that exempts up to 20 percent of net taxable income.

Nelnet CEO Jeff Noordhoek said the tax plan will greatly benefit the financial services company, which does very little business overseas and pays close to the full corporate tax rate. According to its 2016 annual report, its effective tax rate that year was 35.5 percent.

While the reduction in taxes will provide the company extra cash to invest and return to shareholders, "We also want to share this benefit with our employees," Noordhoek said.

All Nelnet employees (except for senior managers) who have been with the company for at least six months will receive the $1,000 bonus. Those employed less than six months will get $500.

Pinnacle Bank said 1,007 employees will receive the $1,000 bonuses.

"We feel strongly that the message should be loud and clear that this is a tax cut that will benefit all Americans,” Pinnacle Bancorp Chairman Sid Dinsdale said in a news release.

Nelnet and Pinnacle Bank join a number of other companies that have announced plans to share some of their tax savings with workers.

AT&T and Comcast both announced Wednesday that they would give $1,000 bonuses to their employees, while Wells Fargo, which has several hundred employees in Nebraska, said it would raise its minimum wage to $15 a hour.

The bonus plan will cost Nelnet about $4 million, but based on its 2016 income tax numbers, the corporate tax rate cut should reduce its income tax liability by more than $50 million.

Pinnacle Bank will spend a little more than $1 million to pay out employee bonuses.


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