Instacart taxes for full-service shoppers

Instacart has two kinds of shoppers. In-store shoppers are employees who get a W-2 with tax withheld. Full-service shoppers, who shop and deliver, are independent contractors who handle their own taxes. This guide is for them.

Your 1099-NEC

Full-service shoppers get their earnings, including tips, reported on Form 1099-NEC. Starting with payments made in 2026, a client or platform only has to send you a Form 1099-NEC once it pays you $2,000 or more in a year (it was $600), under the One Big Beautiful Bill Act. The threshold is set to adjust for inflation after 2026.

Either way, every dollar is taxable whether or not you get a form. Your own records are what count.

Tips

Tips are taxable income. For 2025 through 2028, the new "no tax on tips" deduction lets eligible workers deduct up to $25,000 of qualified tips from income tax (it phases out above $150,000 of modified AGI, $300,000 joint, and for the self-employed can't exceed your net profit from that work). It doesn't reduce self-employment tax. Treasury's list of tipped occupations includes a transportation and delivery group; check that your work is listed before claiming it.

Common write-offs

Groceries you buy for customers with the Instacart payment card aren't your income or your expense, so leave them out.

Mileage from the store to each customer and between batches while working. 2026 rates: 72.5¢ through June 30, 76¢ from July 1.
Insulated bags, coolers and carts you buy for orders.
Parking and tolls on deliveries.
The business share of your phone and data plan.
Health insurance premiums you pay yourself (self-employed health insurance deduction), if you aren't eligible for an employer plan.
Retirement contributions to a SEP IRA or solo 401(k), which lower income tax (not self-employment tax).

How much to set aside

Example (an estimate, single filer, no other job, no state tax): you earn $30,000 in 2026 and drive 15,000 business miles, half before July 1. Your mileage deduction is about $11,138, so your profit is about $18,863. Federal income tax plus self-employment tax on that comes to roughly $2,780: about 15% of profit, but only 9% of what you were paid.

Add your state's income tax on top.

Know your number for every payment.

Import from Venmo, Cash App, PayPal, Stripe, Square or your bank. No bank login required. Reminder before your trial ends.

Get the app Try the calculator

Frequently asked questions

Does Instacart withhold taxes?

Not for full-service shoppers, who are independent contractors. In-store shoppers are employees and have tax withheld from their paychecks.

Is the Instacart card spending income?

No. Money you spend on a customer's order with the Instacart payment card isn't your income, and you can't deduct it either.

Sources

Estimates and general information, not tax advice. Check with a tax professional for your situation.