Instacart Shopper Taxes in New York - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in New York

Navigating the bustling streets of New York City 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 during tax season.

The IRS requires all self-employed individuals, including Instacart shoppers, to report their income and pay taxes. This is primarily done using Schedule C (Profit or Loss from Business) when filing Form 1040. Crucially, income exceeding $400 necessitates the payment of self-employment taxes, covering both Social Security and Medicare contributions.

How New York Handles Gig Worker Taxes

As a resident of New York, filing a state income tax return is mandatory, regardless of whether you meet the federal filing threshold. New York operates on a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, New York residents who are self-employed will primarily use Form IT-201, Resident Income Tax Return, to report their earnings. Instacart income, reported on your federal Schedule C, will be transferred to Form IT-201. New York also requires a separate form, IT-201-B, Schedule B – Business Income, to detail your self-employment income and related deductions. It’s important to note that New York State also has its own self-employment tax calculation, which is based on your net earnings from self-employment. Estimated taxes may be required to be paid quarterly if you anticipate owing more than $1,000 in New York State taxes. Failure to pay estimated taxes can result in penalties. New York also offers various credits and deductions that may reduce your tax liability, so thorough research is recommended. Staying compliant with New York’s tax laws is essential for avoiding penalties and ensuring a smooth tax filing process. For more information and resources, please visit the New York State Department of Taxation and Finance: https://www.tax.ny.gov/

Top Tax Deductions for New York Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given the high cost of living and frequent traffic in New York, carefully tracking mileage is crucial for maximizing this deduction.
• Tolls & Parking: New York City and its surrounding areas have extensive toll systems, including bridges and tunnels operated by the MTA. Keep detailed records of all toll expenses and parking fees incurred while actively shopping.
• Phone & Data Plan: The portion of your monthly phone and data plan used for Instacart shopping is deductible. Maintain a log of business usage to justify the deduction.
• Vehicle-Related Costs: Expenses like car washes (to maintain a professional appearance), phone mounts, insulated bags, and other supplies directly related to your Instacart work are 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

This tax covers both Social Security and Medicare taxes. Unlike traditional employment where these taxes are withheld from your paycheck, as an Instacart shopper, you are responsible for paying both the employer and employee portions, totaling 15.3% on net earnings over $400. This is a significant tax obligation, so proper planning and budgeting are essential.