Instacart Taxes: Full-Service vs In-Store Shoppers, 1099s and Quarterly Payments

Updated 2026-10-18 · Not tax advice

Figures used: Figures are from 2026 IRS sources: the 2026 Form 1040-ES (standard deduction $16,100 single, tax rate schedules, $184,500 Social Security wage base), IRS standard mileage rates (72.5 cents a mile January to June 2026, 76 cents July to December) and IRS guidance on the qualified tips deduction and 1099 thresholds. 2027 figures are not published yet.

Free: the one-page Q4 2026 estimated tax worksheet (printable, Excel or Google Sheets) and the quarterly estimated tax calculator.

Instacart has two kinds of shoppers, and they are taxed in completely different ways. Full-service shoppers shop and deliver orders. Instacart classifies them as independent contractors. In-store shoppers pick and stage orders inside one store without delivering, and Instacart has classified them as part-time employees (D.C. Attorney General complaint, 2020). Start by checking which form you get.

Full-service vs in-store: what changes

	Full-service shopper	In-store shopper
Classification	Independent contractor	Part-time employee
Tax form	1099-NEC	W-2
Tax withheld from pay	No	Yes, income tax plus 7.65% Social Security and Medicare
Self-employment tax	15.3% of 92.35% of net profit, once net self-employment earnings from all your businesses total $400 or more	None. The employer pays its half
Quarterly estimated tax	Usually, if you’ll owe $1,000 or more	Not for this pay
Deduct mileage, phone, gear	Yes, on Schedule C	No. Employees can’t deduct unreimbursed job costs on the federal return
Where income goes	Schedule C and Schedule SE	Form 1040, line 1a

The rest of this guide is about full-service shoppers, since they are the ones who have to work out and pay their own tax. The IRS rules for contractors are in its Form 1099-NEC and independent contractors FAQ.

What counts as income, and what doesn’t

Income: batch pay, bonuses and incentives, and customer tips. It all goes on Schedule C line 1, whether or not a 1099 arrives.

Not income or an expense: the Instacart payment card. It pays for the customer’s groceries at checkout. That money is Instacart’s, so don’t add card purchases to your expenses or to your income. Shoppers who log it by mistake end up with numbers that make no sense.

Deductions for full-service shoppers

Expense	How it works	Schedule C line
Mileage	Business miles × 72.5 cents (Jan to Jun 2026) or 76 cents (Jul to Dec 2026), plus parking and tolls	9
Phone	The business-use share of your plan and phone	25 or 27b
Insulated bags, coolers, cart, phone mount	Gear used for orders	22
Instant cashout fees	Fees you pay to get paid faster	27b (Part V)
Qualified tips	Up to $25,000, no more than your net shopping profit. Income tax only	Schedule 1-A, not Schedule C

Keep your own mileage log. Grocery batches often mean several stops, waits and returns. Record the date, purpose and business miles for each shift. That is the record the IRS expects (Pub. 463). Unless your home is your principal place of business (a qualifying home office), the drive from home to your first store and from your last drop-off back home is generally nondeductible commuting, so log the miles between those points. With the standard mileage rate you can’t also deduct gas, insurance or repairs for that car (IRS standard mileage rates).

The tips deduction applies to full-service shoppers. The IRS list of tipped occupations includes goods delivery people (code 804), with grocery delivery driver and app-based delivery person as examples (IRS list). The deduction runs from 2025 to 2028, phases out above $150,000 of modified AGI ($300,000 joint), needs a valid Social Security number and requires married couples to file jointly (IRS). It lowers income tax only. Tips still count for self-employment tax. To qualify, a self-employed worker’s tips have to be reported to them on a Form 1099-NEC, 1099-MISC or 1099-K (IRS guidance for gig workers). If Instacart pays you less than the $2,000 reporting threshold and sends no 1099, your app history still shows taxable income, but check that guidance before claiming the tips deduction.

Worked example: full-service shopper with a day job

Fictional numbers. Priya is single and works a W-2 office job paying $45,000, with $3,600 of federal income tax withheld for the year. On evenings and weekends she does full-service Instacart batches. Her 2025 return covered the full year, showed AGI under $150,000 and total tax of $3,500. Her tips appear on her 1099-NEC, and her miles are business miles, after leaving out commuting.

Step	Calculation	Amount
Instacart earnings	Batch pay and bonuses $14,000 + tips $6,000	$20,000
Mileage	4,000 miles × $0.725 + 4,000 miles × $0.76	$5,940
Other expenses	Phone share $240, bags and cooler $90, instant cashout fees $30	$360
Net profit	$20,000 − $5,940 − $360	$13,700
Self-employment tax	$13,700 × 92.35% × 15.3%	$1,936
AGI	$45,000 wages + $13,700 − half of SE tax ($968)	$57,732
Taxable income before QBI	$57,732 − $16,100 standard deduction − $6,000 tips deduction	$35,632
QBI deduction	Smaller of 20% × $6,732 (profit minus half of SE tax minus the $6,000 of deducted tips) or 20% × $35,632	$1,346
Taxable income	$35,632 − $1,346	$34,286
Income tax	$1,240 + 12% × ($34,286 − $12,400)	$3,866
Total federal tax	$3,866 + $1,936	$5,802
Withheld at the day job		$3,600
Still to pay	$5,802 − $3,600	$2,202

What that means for Priya:

• She is already inside the safe harbor. Her $3,600 of withholding is more than 100% of her 2025 tax ($3,500), so she won’t owe an underpayment penalty even without quarterly payments (safe-harbor rule). She will still owe $2,202 in April.
• Better: raise withholding at the job. Adding about $2,202 of extra withholding through form W-4 over her remaining 2026 paychecks covers the bill. Withholding counts as paid evenly through the year, so adding it in October still covers earlier quarters (Pub. 505). The W-4 and side-hustle guide walks through Step 4(c) per paycheck; the IRS Tax Withholding Estimator helps set the amount.
• Or pay quarterly. Estimated payments of $2,202 total work too, but each payment only counts from the date she makes it.
• The tips deduction is worth $576 here. Without it her income tax would be about $4,442. It is worth less than 12% of $6,000 because deducted tips also come out of the income the QBI deduction is figured on (IRS QBI guidance). Self-employment tax is $1,936 either way.

The W-2 wages don’t change her self-employment tax here, because wages plus self-employment earnings are well under the $184,500 Social Security wage base. State tax is extra.

Shopping full-service with no other job

With no withholding, quarterly estimated payments are the usual route. 2026 payments are due April 15, June 15 and September 15, 2026, and January 15, 2027 for September to December. Work out the amount with the Form 1040-ES worksheet or the free quarterly calculator, and see how much to set aside from 1099 income. Delivery-only drivers can compare with the DoorDash tax guide, which walks through a full-time example.

Your Instacart 1099-NEC

Instacart sends the 1099-NEC by January 31. Recent years’ forms are delivered by Instacart itself; older years came through Stripe Express. For payments made in 2026, a payer generally has to send a 1099-NEC once it pays you $2,000 or more; the threshold was $600 before 2026 (IRS). If you earned less, you still report it, using your earnings history in the Shopper app.

Sources

• Form 1099-NEC and independent contractors, IRS
• District of Columbia v. Maplebear Inc. (Instacart), complaint, August 2020 (shopper classifications)
• Form 1040-ES (2026), IRS
• Publication 505, Tax Withholding and Estimated Tax, IRS
• Standard mileage rates, IRS
• Publication 463, Travel, Gift, and Car Expenses, IRS
• Occupations that customarily and regularly received tips, IRS
• What the “No Tax on Tips” deduction means for you, IRS
• Am I required to file a Form 1099?, IRS

Instacart is a trademark of Maplebear Inc. Keelsheet isn’t affiliated with Instacart. This guide is general information, not tax advice. Confirm figures with IRS.gov or a qualified tax professional.

FAQ

Is Instacart a 1099 or W-2 job?

Both exist. Full-service shoppers, who shop and deliver with their own car, are independent contractors paid on a 1099-NEC. In-store shoppers, who only shop and stage orders in one store, have been classified as part-time employees paid on a W-2. Which form you get tells you which rules apply.

Do Instacart full-service shoppers pay quarterly taxes?

Usually, if you expect to owe $1,000 or more for the year after withholding and refundable credits. If you also have a W-2 job, you can raise withholding there instead. Withholding counts as paid evenly through the year, so it can still cover earlier quarters when you add it late.

Do I report the money on my Instacart payment card?

No. The Instacart card pays for the customer's order. Those purchases are not your income and not your expense. Your income is batch pay, bonuses and tips. Your expenses are your own costs, like mileage, your phone and bags.

Are Instacart tips tax-free?

Partly. Grocery delivery drivers are on the IRS list of tipped occupations, so full-service shoppers can deduct qualified tips from income tax, up to $25,000 and no more than their net shopping profit. Tips are still subject to self-employment tax.

When do I get my Instacart 1099?

Instacart sends 1099-NECs by January 31. For payments made in 2026, a payer generally has to send one once it pays you $2,000 or more; before 2026 the threshold was $600. Report all your earnings either way.