Ride Share Drivers: Form 1099

Many drivers for ride-sharing companies such as Uber and Lyft are considered independent contractors for tax purposes and will receive Form 1099-NEC, Nonemployee Compensation, or Form 1099-K, Payment Card and Third Party Network Transactions, or both, from the ride-sharing company by January 31 for year 2020 activity.  

You are required to report and pay taxes on all income received from the ride-sharing company whether you received a 1099 form.  Generally, any income received is taxable unless it is specifically exempted by law.  

Form 1099-K

Uber drivers will receive Form 1099-K, Payment Card and Third Party Network Transactions, for the gross fare paid by riders and expenses that Uber paid on the driver’s behalf when the amount earned is more than $20,000 for the year and more than 200 payments are received.  

Uber provides a 1099-K tax summary that breaks down the fare and expense totals. Use the “Total” from the 1099-K Breakdown section instead of “Gross Fares” to report total gross receipts on Schedule C (Form 1040), Profit or Loss From Business, line 1.  The fees charged by Uber are reported as business deductions on various lines of Schedule C. 

Form 1099-NEC

Beginning with Tax Year 2020, Form 1099-NEC, Nonemployee Compensation, is used to report payments of nonemployee compensation (NEC) previously reported in box 7 on Form 1099-MISC.

Referral fees, bonuses, or other income are reported on Form 1099-MISC, Miscellaneous Income when the total paid to you by the ride-sharing company exceeds $600.  The amount from box 7 on Form 1099 is reported as gross receipts on line 1 of Schedule C.  

Take Action

  • Check your company’s online account for details on your income and expenses before going to your tax appointment.

  • Refer to On-Demand Drivers for information on the mileage rate, deductible car and other expenses to reduce your tax liability.

  • Check out the IRS’ Gig Economy Tax Center to find forms, keep records, and file and pay taxes for gig work.

  • Need help to file your taxes and make sense of it all? Contact us.

Lovie Edwards1099-K, 1099-NEC, On-demand driver, Schedule C, 1099-nec