Instacart Shopper Taxes in Hawaii - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Hawaii

Navigating the vibrant streets and delivering groceries through Instacart offers a flexible income opportunity in the Aloha State, but it also comes with tax responsibilities. As an independent contractor for Instacart, earnings are considered self-employment income, requiring diligent record-keeping and accurate tax filing.

The IRS requires all individuals earning $400 or more as self-employed individuals to report their income on Schedule C (Profit or Loss from Business) with Form 1040. Furthermore, this income is subject to self-employment tax, which covers both Social Security and Medicare taxes. Instacart does not withhold these taxes from your payments, meaning you are responsible for calculating and paying them directly to the IRS.

How Hawaii Handles Gig Worker Taxes

As a resident of Hawaii, filing a state income tax return is mandatory, even if your federal tax liability is zero. Hawaii operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed Instacart shoppers will need to file Form N-11, the Hawaii General Excise/Income Tax Return. This form is used to report both your income tax liability and your General Excise Tax (GET) liability. The GET is a tax on gross income, and as an Instacart shopper, you are generally required to collect and remit GET on the delivery fees you charge. The GET rate for most services is 4%. It's crucial to understand that Hawaii's tax laws can be complex, and the GET requirements for independent contractors are often a point of confusion. The Department of Taxation offers resources and guidance to help navigate these requirements. Failure to properly file and pay both income tax and GET can result in penalties and interest. Keep detailed records of all income and expenses, and consider consulting with a tax professional familiar with Hawaii's tax laws to ensure compliance. Hawaii also offers various credits and deductions that may reduce your tax liability, so exploring these options is recommended.

Top Tax Deductions for Hawaii Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given the island geography and potential for significant mileage between deliveries, this deduction can substantially reduce your taxable income.
• Tolls & Parking: While Hawaii doesn't have traditional toll roads, parking fees incurred while actively shopping or delivering orders are deductible. Keep receipts for all parking expenses.
• Phone & Data Plan: The portion of your phone and data plan used for business purposes is deductible. If you use your phone solely for Instacart, you can deduct the entire cost. Otherwise, calculate the percentage of time the phone is used for work.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, and insulated hot/cold bags used for deliveries are all deductible.

Key Warning: You cannot deduct both the standard mileage rate and actual car expenses like gas or repairs in the same year. Choose the method that yields the larger deduction.

Understanding the 15.3% Self-Employment Tax

Self-employment tax is comprised of Social Security and Medicare taxes. When working for an employer, these taxes are split between the employer and employee. As an independent contractor, you are responsible for the full 15.3% amount on net earnings exceeding $400. This is paid directly to the IRS, often through estimated tax payments throughout the year to avoid penalties.

For more information on Hawaii state taxes, please visit the Hawaii Department of Taxation: https://tax.hawaii.gov/