Shipt Tax Form: 1099-NEC, Schedule C, and Deductions

If you shop for Shipt, the tax form you’ll receive is a 1099-NEC, not a W-2. Shipt classifies shoppers as independent contractors, so no taxes come out of your pay during the year, and the 1099-NEC simply reports what you earned. You take that number, report it on Schedule C with your business expenses subtracted, calculate self-employment tax on Schedule SE, and pay the total with your 1040.

How You Get the 1099-NEC

Shipt issues Form 1099-NEC (Nonemployee Compensation) to any shopper who earned $600 or more during the calendar year. The form covers your total earnings — base pay, bonuses, and customer tips — and Shipt must send it to both you and the IRS by January 31.1Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC

Delivery goes through Stripe.2Stripe. 1099 Tax Forms for Online Platforms If you consented to paperless delivery, you’ll get an email from Stripe Express with a link to download the digital copy. If you didn’t opt in, Shipt mails a paper copy to whatever address it has on file, so check that your address is current before year-end.

One trap worth flagging: the $600 threshold only decides whether Shipt has to send you a form. If you earned less, you still owe tax on that income. Report it anyway.

Reporting the Income on Schedule C

As an independent contractor, you’re treated as a sole proprietor. Your Shipt income and business expenses go on Schedule C (Profit or Loss From Business), which flows into your Form 1040.3Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) The figure on your 1099-NEC is gross revenue: everything Shipt paid you before you subtract a dime of costs.

What gets taxed is net profit, not that gross number. A W-2 employee can’t write off gas or car wear against their wages, but you can deduct every ordinary and necessary expense of running the delivery work. Tracking those costs closely is the difference between paying tax on your full 1099 amount and paying tax on a much smaller figure.

Deductions That Lower What You Owe

The IRS lets you deduct any expense that’s ordinary and necessary for your work. For most Shipt shoppers, vehicle costs dwarf everything else, but the smaller items add up.

Vehicle Expenses

You can claim vehicle costs one of two ways: the standard mileage rate or the actual expense method. Most delivery drivers use the standard rate because it’s simpler and usually produces a bigger deduction. For the 2026 tax year, the IRS set the standard business mileage rate at 72.5 cents per mile.4Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile For 2025, the rate was 70 cents per mile.5Internal Revenue Service. Standard Mileage Rates

The standard rate already accounts for depreciation, maintenance, fuel, and insurance, so you can’t stack those individually on top. Business-related parking fees and tolls are deductible separately, though.6Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses Parking at a store while you shop an order counts; parking at your own home doesn’t.

To claim the deduction you need a contemporaneous mileage log with the date, distance, destination, and business purpose of each trip. Contemporaneous is the operative word. A log you patch together from memory in April won’t survive an audit. Start a mileage-tracking app on day one.

The actual expense method requires tracking every vehicle cost — gasoline, oil changes, repairs, insurance, registration, depreciation or lease payments — and deducting the business-use percentage. It’s more work and requires receipts, but for an expensive vehicle or one with heavy maintenance, it can beat the standard rate.

Other Deductible Expenses

Beyond the vehicle, several ordinary costs of the job come off your Schedule C income:

  • Insulated bags, coolers, and organizational bins you bought for deliveries.
  • Gloves, hand sanitizer, and cleaning supplies used between orders.
  • The business-use share of your cell phone bill. If roughly 60% of your usage is the Shipt app, navigation, and customer messages, 60% of the bill is deductible. Be ready to defend the percentage if asked.
  • A home office, but only if the space is used exclusively and regularly as your principal place of business. A dining table you also eat at won’t qualify.7Internal Revenue Service. Topic No. 509, Business Use of Home

Self-Employment Tax

This is what surprises new contractors. When you work for an employer, the employer pays half of your Social Security and Medicare taxes. As a self-employed shopper, you pay both halves — a combined 15.3%, made up of 12.4% Social Security and 2.9% Medicare.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)

The Social Security portion applies only to the first $184,500 of net earnings for 2026.9Social Security Administration. Contribution and Benefit Base The 2.9% Medicare tax has no cap, and an additional 0.9% Medicare surtax applies to earnings above $200,000 for single filers or $250,000 for married filing jointly.10Internal Revenue Service. Topic No. 560, Additional Medicare Tax

Self-employment tax is calculated on Schedule SE and applies to 92.35% of your Schedule C net profit, not the full amount.11Internal Revenue Service. About Schedule SE (Form 1040), Self-Employment Tax You also get to deduct half of your self-employment tax when calculating adjusted gross income.12Internal Revenue Service. Topic No. 554, Self-Employment Tax That’s an above-the-line deduction on Schedule 1 of your 1040, and plenty of gig workers miss it because it flows through Schedule SE instead of appearing on Schedule C.

Quarterly Estimated Payments

Because Shipt withholds nothing, the IRS expects you to pay as you go rather than waiting until April. You’re required to make quarterly estimated payments if you expect to owe $1,000 or more for the year.13Internal Revenue Service. 2026 Form 1040-ES, Estimated Tax for Individuals Those payments cover both income tax and self-employment tax.

The 2026 deadlines are:14Internal Revenue Service. When to Pay Estimated Tax

  • April 15, for income earned January through March
  • June 15, for income earned April through May
  • September 15, for income earned June through August
  • January 15 of the following year, for income earned September through December

If a deadline falls on a weekend or holiday, the payment is due the next business day. Calculate payments on Form 1040-ES, and submit through IRS Direct Pay or EFTPS.

Miss a deadline or underpay and you’ll owe an underpayment penalty. You can avoid it by meeting one of two safe harbors: paying at least 90% of your current-year tax, or paying 100% of last year’s tax (110% if your AGI was over $150,000, or over $75,000 if married filing separately).15Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty If your earnings swing seasonally, the prior-year method is the safer bet: divide last year’s tax by four and send that.

Bigger Deductions Worth Knowing

The Qualified Business Income Deduction

The QBI deduction lets you deduct up to 20% of your net business income from taxable income.16Internal Revenue Service. Instructions for Form 8995 It reduces income tax only, not self-employment tax, but the effect is real. If your taxable income before the deduction is at or below $201,750 (single) or $403,500 (married filing jointly) for 2026, you use the simplified Form 8995. Most shoppers fall comfortably under those thresholds. On a $30,000 Schedule C profit, the QBI deduction can cut taxable income by up to $6,000; at a 22% marginal rate, that’s $1,320 back.

Retirement Accounts

A SEP IRA lets you contribute up to 25% of your net self-employment compensation, capped at $72,000 for 2026.17Internal Revenue Service. SEP Contribution Limits (Including Grandfathered SARSEPs) For a sole proprietor, net compensation means Schedule C net profit minus the deductible half of self-employment tax, which puts the effective rate at about 20% of net profit. Contributions are deductible, and you can open and fund the account up to your tax filing deadline including extensions.

A Solo 401(k) allows both employee deferrals (up to $24,500 for 2026, plus a catch-up if you’re 50 or older) and employer profit-sharing contributions.18Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026 At lower income levels a Solo 401(k) usually allows a larger total contribution, but you have to set the plan up by December 31 of the tax year.

Self-Employed Health Insurance

If you pay for your own health insurance and aren’t eligible for a spouse’s employer plan, you can deduct 100% of your premiums for medical, dental, and vision coverage as an above-the-line adjustment.19Internal Revenue Service. Instructions for Form 7206 (2025) Your net self-employment income has to be at least equal to the premiums, and you can’t claim any month you were eligible for employer-subsidized coverage. Claim it on Schedule 1 using Form 7206.

If Your Return Doesn’t Match the 1099

The IRS matches every 1099-NEC it receives against your filed return. If there’s a mismatch — you forgot Shipt income, or entered the wrong amount — you’ll likely receive a CP2000 notice. It isn’t a bill or an audit; it’s a proposed adjustment.20Internal Revenue Service. Topic No. 652, Notice of Underreported Income – CP2000 You have 30 days to respond, 60 if you’re outside the U.S. If the IRS has it right, sign and pay before interest builds. If it has it wrong, send a written explanation with documentation. Ignore the notice and the IRS moves on to a Statutory Notice of Deficiency, which is a much more serious step.

The Forms at a Glance

The forms in play for a Shipt shopper’s return: