Instacart Shopper Taxes in Rhode Island - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for Instacart Shoppers in Rhode Island

Navigating the charming, yet sometimes congested, streets of Providence and beyond 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 your federal income tax return (Form 1040). Furthermore, earnings over $400 necessitate the payment of self-employment taxes, covering both Social Security and Medicare contributions, which are not automatically withheld from your Instacart payouts.

How Rhode Island Handles Gig Worker Taxes

As a resident of Rhode Island, filing a state income tax return is mandatory, even if no Rhode Island income tax was withheld. Rhode Island employs a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, self-employed individuals will primarily use Form RI-1040NR to report their income and calculate their state tax liability. It's crucial to accurately report all income received from Instacart, as the Division of Taxation actively monitors 1099-NEC forms issued by third-party platforms. Rhode Island also allows for itemized deductions similar to the federal level, potentially reducing your overall tax burden. Be aware of Rhode Island’s rules regarding estimated tax payments; if you anticipate owing $1,000 or more in state income tax, you may be required to make quarterly estimated tax payments to avoid penalties. The state also offers various credits and deductions that could benefit Instacart shoppers, such as those related to business expenses. Staying informed about these changes and utilizing available resources is vital for compliant and efficient tax filing. For the most up-to-date information and forms, please visit the Rhode Island Division of Taxation website: https://www.ri.gov/taxation/

Top Tax Deductions for Rhode Island Drivers

• Standard Mileage: The most popular deduction for Instacart shoppers. The 2025 rate is 70 cents per mile. Given Rhode Island’s relatively smaller geographic size, the standard mileage rate is often the most advantageous method for tracking vehicle expenses.
• Tolls & Parking: Rhode Island has tolls on certain bridges and highways, like the Newport Pell Bridge. Keep detailed records of all toll expenses and parking fees incurred while actively shopping or delivering for Instacart.
• Phone & Data Plan: If you use your personal phone for Instacart, you can deduct the percentage of your monthly bill that corresponds to business use. Maintain a log of the time spent using your phone for work-related activities.
• Vehicle-Related Costs: Expenses like car washes (to maintain a professional appearance), phone mounts, insulated hot/cold bags, and dash cams are all potentially deductible 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 comprises two components: 12.4% for Social Security and 2.9% for Medicare. Unlike traditional employment, Instacart 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.