Instacart Shopper Taxes in New Jersey - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in New Jersey

Navigating the Garden State as an Instacart shopper offers flexibility, but also brings tax responsibilities. As an independent contractor, earnings from Instacart are considered self-employment income, requiring careful attention to both federal and New Jersey state tax regulations.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and pay taxes on it. This is typically done using Schedule C (Profit or Loss from Business) when filing Form 1040. Furthermore, because no taxes are automatically withheld from your Instacart earnings, you’ll likely owe self-employment tax, covering both Social Security and Medicare contributions.

How New Jersey Handles Gig Worker Taxes

As a resident of New Jersey, filing a state income tax return is mandatory, even if your only income is from Instacart. New Jersey operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, New Jersey residents earning income as independent contractors will primarily use Form NJ-1040, and Schedule NJ-SE (Self-Employment Earnings) to report their earnings. It’s crucial to accurately calculate your net profit from Instacart shopping (total earnings minus business expenses) as this figure will be used to determine your New Jersey income tax liability. New Jersey also allows for itemized deductions, which could further reduce your taxable income. Keep detailed records of all income and expenses. New Jersey also has a minimum tax calculation that may apply even if your tax liability calculated using the graduated rates is zero. Be aware of estimated tax payments; if you expect to owe $1,000 or more in New Jersey income tax, you may be required to make quarterly estimated tax payments to avoid penalties. The Division of Taxation offers resources and guidance for self-employed individuals.

For more information on New Jersey state taxes, please visit the New Jersey Division of Taxation.

Top Tax Deductions for New Jersey Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given New Jersey’s relatively high cost of living and frequent traffic, the standard mileage rate is often the most beneficial option.
• Tolls & Parking: New Jersey drivers frequently encounter tolls on the New Jersey Turnpike and Garden State Parkway. These tolls, along with any parking fees incurred while actively shopping or delivering, are deductible business expenses.
• Phone & Data Plan: If you use your phone for navigation, communication with customers, or accessing the Instacart app, you can deduct the percentage of your monthly bill attributable to business use.
• Vehicle-Related Costs: Expenses like car washes to maintain a professional appearance, phone mounts for safe navigation, insulated hot bags, and even hand sanitizer are deductible as business expenses.

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

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 exceeding $400. This is a significant tax obligation, so proper planning and accurate income tracking are essential.