Amazon Flex Taxes in Minnesota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Amazon Flex Drivers in Minnesota

Navigating the North Star State as an Amazon Flex driver offers flexibility, but also introduces unique tax considerations. Delivering packages across the Twin Cities and beyond means diligent record-keeping is crucial for maximizing deductions and ensuring compliance with both federal and Minnesota tax laws.

As an independent contractor for Amazon Flex, earnings are considered self-employment income. This necessitates reporting income and expenses on Schedule C (Profit or Loss From Business) with your federal income tax return (Form 1040). Furthermore, earnings exceeding $400 require the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your Flex payments.

How Minnesota Handles Gig Worker Taxes

Minnesota, as a state with a progressive income tax system, requires residents to file a state income tax return regardless of income level. As an Amazon Flex driver, your self-employment income is subject to Minnesota income tax. Minnesota utilizes a graduated tax rate system, meaning the tax rate increases as your income increases. For the 2025 tax year, Minnesota’s income tax rates are expected to remain consistent with prior years, ranging from 5.35% to 9.85% depending on your taxable income. The primary form for reporting self-employment income and calculating your Minnesota income tax liability is Form M1, Individual Income Tax Return. You will also likely need Schedule 1, Additional Income and Adjustments to Income, to report your Schedule C profit. Minnesota also offers various credits and deductions that may reduce your tax liability, so exploring these options is recommended. It's important to note that Minnesota does not offer a separate state-level self-employment tax, but your federal self-employment tax will impact your overall Minnesota tax liability. Accurate record-keeping of all income and expenses is vital for proper tax filing.

For more information and resources regarding Minnesota state taxes, please visit the Minnesota Department of Revenue website: https://www.revenue.state.mn.us/

Top Tax Deductions for Minnesota Drivers

• Standard Mileage: The most popular and often most beneficial deduction. The 2025 rate is 70 cents per mile. Given Minnesota's sometimes harsh winter driving conditions and potential for increased vehicle wear and tear, the standard mileage rate is often a strong choice for maximizing deductions.
• Tolls & Parking: While Minnesota doesn't have extensive toll roads, any tolls incurred during deliveries are deductible. Parking fees directly related to deliveries are also deductible.
• Phone & Data Plan: The portion of your monthly phone and data plan used for business purposes (tracking deliveries, communicating with Amazon, using navigation apps) is deductible. Keep a log of business usage to support this deduction.
• Vehicle-Related Costs: Expenses like car washes (especially important during Minnesota winters to combat road salt), phone mounts, dash cams, and insulated hot bags used to maintain delivery temperatures are deductible.

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

Understanding the 15.3% Self-Employment Tax

The 15.3% self-employment tax comprises two components: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, Amazon Flex and other gig platforms do not withhold these taxes from your earnings. Therefore, it’s your responsibility to calculate and pay this tax, typically through estimated tax payments made quarterly to the IRS. Failure to do so may result in penalties.