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If you live in New York City, you pay city income tax of 3.078% to 3.876% of your NYC taxable income. That is on top of federal and New York State income tax and self-employment tax. For a single driver with $40,000 of NYC taxable income in 2025, the schedule gives about $1,431 of city tax. The tax is on taxable income, meaning profit after your car costs and other deductions, not on what riders paid. Figures are from the 2025 NYC tax rate schedule in the IT-201 instructions (NYS Tax IT-201-I (2025)).
This is general information, not tax advice. The 2026 schedule will be in the 2026 instructions. Check them before using these numbers for 2026.
Rate tables (tax year 2025)
Source: IT-201-I (2025), New York City tax rate schedule. The instructions say to use the NYC tax table when line 47 is less than $65,000 and the rate schedule at $65,000 or more. The table can give slightly different amounts, so the examples below use the schedule only to show the math.
Worked examples (fictional, 2025 schedule)
- Single, NYC taxable income $40,000: $858 + 3.819% × $15,000 = $1,430.85, about 3.6% of taxable income.
- Head of household, $40,000: $1,030 + 3.819% × $10,000 = $1,411.90.
- Married filing jointly, $60,000: $1,545 + 3.819% × $15,000 = $2,117.85.
- Single, $70,000: $1,813 + 3.876% × $20,000 = $2,588.20.
Every dollar of business deduction lowers taxable income, so it also lowers this city tax. A $1,000 bigger car deduction for a single driver in the 3.819% bracket cuts NYC tax by about $38, before any federal, state or self-employment tax savings. The tax deduction estimator helps you find the deduction.
What "NYC taxable income" means
On Form IT-201, line 47 is NYC taxable income. For most full-year residents the instructions say to "enter the line 38 amount on line 47". Line 38 is your New York State taxable income. That figure starts from federal income, which for a driver includes Schedule C profit, not gross fares. Some residents also qualify for the NYC household credit (line 48), which lowers the city tax.
Residents only
NYC tax depends on where you live, not where you drive. "All city residents' income, no matter where it is earned, is subject to New York City personal income tax. Nonresidents of New York City are not liable for New York City personal income tax" (NYS Tax FAQ). You are a resident if your domicile is in the five boroughs, or if you keep a permanent place to live there and spend 184 days or more in the city. Living outside the city? See do non-residents pay NYC income tax?
City residents report NYC tax on the state return, Form IT-201 (NYS Tax). The MCTMT, a separate tax on self-employment earnings in the MTA district, is reported on the same form. See MCTMT for TLC drivers.
Estimated payments: the $300 rule
App pay and meter income usually come with no tax withheld. NYS says you may need estimated payments when no tax is withheld, but you don't need to pay estimated tax if you expect to owe less than $300 of New York State, $300 of New York City and $300 of Yonkers income tax after withholding and credits. You are also safe if your payments cover 90% of this year's tax or 100% of last year's (110% if last year's NY AGI, or MTA-district self-employment earnings, was over $150,000) (NYS Tax).
In the single $40,000 example, the city tax alone is above $300, so unless one of the safe-harbor rules above applies, that driver would likely need estimated payments. The 2026 dates are April 15, June 15 and September 15, 2026 and January 15, 2027 (NYS Tax). How to pay: quarterly estimated taxes.
What to do next
- Estimate your profit: fares and app pay minus car costs, tolls and fees.
- Check your residence status.
- Use the table above for a rough city figure, and add state and federal tax with a preparer.
- If you get tips, read about the federal no tax on tips deduction and ask how New York treats it.
More on the taxes hub.
Frequently asked questions
What is the NYC income tax rate for 2025?
It runs from 3.078% to 3.876% of NYC taxable income. For a single filer: 3.078% up to $12,000, then 3.762%, 3.819% and 3.876% on income over $50,000 (IT-201-I 2025).
Do I pay NYC income tax if I only drive in NYC but live elsewhere?
No. NYC personal income tax applies to NYC residents. NYS Tax says nonresidents of New York City are not liable for it.
Is NYC tax charged on my gross app earnings?
No. It is charged on NYC taxable income, which for most full-year residents equals New York State taxable income: your income after business costs and deductions.
Do I have to pay NYC tax in quarterly payments?
You don't need to pay NYS estimated tax if you expect to owe less than $300 of New York State, $300 of New York City and $300 of Yonkers tax after withholding and credits.
Where is NYC tax on my return?
On Form IT-201, the New York State resident return. NYC taxable income is line 47 and the NYC resident tax is line 47a.
Sources
Last reviewed against the official sources on .
- NYS Tax: Instructions for Form IT-201 (2025), NYC tax rate schedule tax.ny.gov
- NYS Tax: New York City, Yonkers, and MCTMT tax.ny.gov
- NYS Tax: Residents, nonresidents and part-year residents FAQs tax.ny.gov
- NYS Tax: Who must make estimated tax payments tax.ny.gov
- NYS Tax: Estimated tax payment due dates tax.ny.gov
Spotted something out of date? Tell us and we'll check it against the official source.
TLC Help is not a law firm and is not affiliated with the NYC Taxi & Limousine Commission or OATH. Explanations on this site are general information, not legal advice. Legal representation is provided by independent attorneys and OATH-registered representatives in our network.