Instacart Shopper Taxes in Maryland - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Maryland

Navigating the Chesapeake Bay and delivering groceries via Instacart offers flexibility, but also comes with tax responsibilities. As an independent contractor for Instacart in Maryland, understanding your tax obligations is crucial for a smooth tax season.

The IRS considers income earned through Instacart as self-employment income. This means you’re responsible for reporting your earnings on Schedule C (Profit or Loss from Business) with your Form 1040, and paying self-employment taxes – covering both Social Security and Medicare – on any net earnings exceeding $400.

How Maryland Handles Gig Worker Taxes

As a resident of Maryland, you are required to file a state income tax return, even if your only income is from Instacart. Maryland utilizes a graduated income tax system, meaning the tax rate increases as your income increases. This differs from a flat tax rate. For self-employed individuals, the primary form used to calculate and report income is Form 502, Maryland Individual Income Tax Return. You will need to report your federal adjusted gross income (AGI) from your federal return onto your Maryland return.

Maryland also has a state and local sales tax, but this is generally handled by Instacart directly, so you typically won’t need to worry about collecting or remitting sales tax yourself. However, it’s always prudent to review Instacart’s documentation for any changes to this policy. Furthermore, Maryland offers various credits and deductions that may apply to your situation, such as the Work Opportunity Tax Credit if you meet specific criteria. Keep thorough records of all income and expenses to maximize potential savings. The Maryland Comptroller's Office provides comprehensive resources for taxpayers, including information on filing requirements, tax rates, and available credits: Maryland Comptroller's Office.

Top Tax Deductions for Maryland Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. For the 2025 tax year, the standard mileage rate is 70 cents per mile. This simplifies expense tracking significantly.
• Tolls & Parking: Maryland drivers frequently encounter tolls, particularly when serving areas around Baltimore and Washington D.C. These toll expenses, along with any parking fees incurred directly while performing Instacart deliveries, are deductible.
• Phone & Data Plan: If you use your personal phone for Instacart (which is common), you can deduct the percentage of your monthly bill that corresponds to business use. Keep a log of the time spent using your phone 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 exclusively for deliveries are all deductible.

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

Understanding the 15.3% Self-Employment Tax

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where your employer withholds these taxes, as an Instacart shopper, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. You'll calculate this on Schedule SE (Self-Employment Tax) and include it with your Form 1040.