NYC Unincorporated Business Tax and TLC Drivers

In short: NYC's Unincorporated Business Tax (UBT) is a city tax on people who carry on a business in New York City without forming a corporation. Under NYC Finance's 2025 instructions, an individual must file a UBT return if total gross income from all business is more than $95,000 (before costs). The tax is 4% of taxable income after allowances, but a business tax credit cancels the whole tax when it is $3,400 or less (NYC-202S instructions, 2025). So you can be required to file and still owe little or nothing.

What we could not confirm: whether each kind of TLC driver — lease taxi driver, owner-driver, app driver — is carrying on an "unincorporated business" for UBT purposes. We couldn't open the Administrative Code text that defines it, and NYC Finance's instructions don't single out drivers. Ask NYC Finance or a tax professional before you file or skip a return. This page explains the published mechanics only; it is not tax advice.

Who must file

NYC-202S instructions: "any individual or unincorporated entity that carries on or liquidates a trade, business, profession or occupation wholly or partly within New York City and has a total gross income from all business regardless of where carried on of more than $95,000 (prior to any deduction for cost of goods sold or services performed) must file." Two or more businesses are combined into one.

For an app driver, "gross income" is closer to the gross receipts on your Schedule C than to your profit. The 202S asks for the amount from Schedule C line 3 (gross receipts less returns) on its own line 15. If your 1099-K gross is near $95,000, read your 1099-K vs what you earned to understand what is in that number.

NYC Finance also says: TLC-licensed or regulated businesses use NAICS code 485310 for taxis and 485320 for limousines on the return, in place of the federal code. That instruction shows NYC Finance expects some TLC businesses to file — it doesn't tell you whether your situation is one of them.

How the tax is figured (NYC-202S)

Worked examples (fictional, simple 202S filer)

These apply only the published steps for a full-year, single-business filer with no other adjustments. They are not a prediction of what you owe.

Check of the middle row with NYC's formula: $4,200 × ($5,400 − $4,200) ÷ $2,000 = $2,520 credit, so $4,200 − $2,520 = $1,680 due. NYC's own example uses a $3,900 tax: credit $2,925, tax due $975.

The examples show why profit matters more than gross: business deductions (car costs, tolls, fees) lower line 1. See the deductions list and try the estimator:

File but owe nothing: how that can happen

The filing test uses gross income; the tax uses profit. A driver can cross the first without coming close to paying anything. A fictional example:

Nadia drives full time in NYC. Her Schedule C shows $96,000 in gross receipts and, after her car rental, gas, tolls and the app's fees, a net profit of $40,000.

• Gross is over $95,000, so the filing requirement is met (if her driving counts as an unincorporated business).
• Allowance: the lower of 20% × $40,000 = $8,000 or $10,000 → $8,000.
• After the $5,000 exemption: $40,000 − $8,000 − $5,000 = $27,000.
• Tax at 4% = $1,080. That is under $3,400, so the business tax credit cancels all of it: $0 due.

For a driver like Nadia, the real cost of UBT is the paperwork, not the tax — and the risk of not filing a return that was required.

Questions to take to NYC Finance or a preparer

1. Does my kind of driving (lease taxi, owner-driver, app driver, black car affiliate) count as an unincorporated business for UBT?
2. Is my "total gross income from all business" the 1099-K gross, my Schedule C gross receipts, or something else?
3. If I drive both a taxi and for an app, are they one business for UBT?
4. Do I qualify for the short Form NYC-202S, or do I need Form NYC-202?
5. As an NYC resident, how much UBT credit can I take on my NYC income tax?

Bring your Schedule C, your 1099s and any app itemization so the answers are based on your numbers. Write down who you spoke to and what they said, with the date. If you are told you don't need to file, that note is useful later. If you are told you do, the NYC-202S is a short form, and the steps above show how the numbers flow from your Schedule C to the credit.

Should I look into UBT?

Filing, dates and estimates

• Due date: Form NYC-202S is due April 15, 2026 for the 2025 calendar year. A six-month extension is available with Form NYC-EXT if you pay the tax you expect to owe.
• File with NYC, not the state: the IT-201 instructions say NYS does not administer UBT, so don't attach the NYC-202S to your state return. UBT payments are not state estimated tax.
• Estimated UBT: Form NYC-5UBTI is required if your UBT is reasonably expected to exceed $3,400, due the 15th day of the fourth month of the year. Dates for your other estimates: quarterly estimated taxes.
• Who can use the short 202S: individuals who, among other conditions, don't allocate business income, don't claim credits other than the business tax credit, have no NOL deduction and file on time. Otherwise it's Form NYC-202.

How UBT fits with your other taxes

• NYC residents: line 53 of the IT-201 lets you claim a New York City UBT credit against your NYC resident income tax if you qualify (IT-201-ATT, Section C). Ask your preparer to check it.
• MCTMT is a separate state tax on self-employed net earnings — see MCTMT.
• Self-employment tax is federal and is figured separately — see self-employment tax.
• Non-residents who work in NYC: UBT is about where the business is carried on, not where you live. See do non-residents pay NYC income tax?

For the whole picture of taxes on app income, see taxes for Uber and Lyft drivers in NYC.