Lyft Driver Taxes in Connecticut - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Lyft Drivers in Connecticut

Navigating the scenic routes and bustling cities of Connecticut as a Lyft driver offers flexibility, but also brings unique tax responsibilities. As an independent contractor, understanding these obligations is crucial for a smooth tax season.

The IRS requires Lyft drivers to report their earnings on Schedule C (Profit or Loss From Business) as part of their Form 1040. Furthermore, earnings exceeding $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions. Platforms such as Lyft do not withhold these taxes, making proactive tax planning essential.

How Connecticut Handles Gig Worker Taxes

As a resident of Connecticut, filing a state income tax return is mandatory, even if no federal tax is owed. Connecticut operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily utilize Form CT-1040EZ, CT-1040, or CT-1040NR/CT-1040EZ to report their Lyft income and calculate their state tax liability. Connecticut also requires the filing of Schedule CT-IT 1040, Self-Employment Income, to report business income. It's important to note that Connecticut conforms to many federal deductions, including those available to Lyft drivers, but there can be differences. Connecticut allows for a deduction for the federal income tax paid. Additionally, Connecticut offers a credit for taxes paid to other states, which may be relevant if driving across state lines. Accurate record-keeping of mileage, expenses, and earnings is vital to ensure proper calculation of state income tax. Failure to file or pay on time can result in penalties and interest. Connecticut’s Department of Revenue Services provides detailed information and resources for self-employed individuals; consult their website for the most up-to-date guidance: Connecticut Department of Revenue Services.

Top Tax Deductions for Connecticut Drivers

• Standard Mileage: The most popular deduction for Lyft drivers. For the 2025 tax year, the rate is 70 cents per mile. Given Connecticut’s relatively high cost of living and fuel prices, this method is often advantageous.
• Tolls & Parking: Connecticut drivers frequently encounter tolls on I-95 and the Merritt Parkway. These tolls, along with any business-related parking fees, are deductible. Keep detailed records of all toll receipts.
• Phone & Data Plan: If you use your phone for Lyft-related activities (navigation, accepting rides, etc.), you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car washes, air fresheners, phone mounts, dash cams, and insulated food bags used for deliveries are deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses (gas, oil changes, repairs, insurance) in the same tax year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

This tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Because Lyft and other platforms treat drivers as independent contractors, they do not withhold these taxes from your earnings. Therefore, it is your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS.