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California taxes for delivery and rideshare drivers (2026)
California taxes your driving profit on top of federal tax, at graduated rates from 1% to 12.3%, with no state version of the tips deduction. Estimated payments follow a California-only schedule of 30%, 40%, 0%, and 30%, app-based drivers can receive a 1099-K at just $600, and some cities, Los Angeles above all, add their own business tax.
This guide covers what changes for a California driver compared with the federal picture on our 1099 gig tax calculator. Choose California in the state selector, then replace the pre-filled rate with the one you work out here if your income differs from the example below.
Key numbers
| Item | What applies |
|---|---|
| Income tax | Yes. Nine rates from 1% to 12.3% (2025 schedule, the latest posted), plus 1% on taxable income over $1 million |
| Standard deduction (single) | $5,706 (2026 Form 540-ES worksheet) |
| Federal tips deduction | Not allowed. FTB lists California as not conforming |
| Estimated tax form | Form 540-ES, paid through Web Pay |
| Estimated tax trigger | Expect to owe $500 or more after withholding and credits |
| Installments | 30% April 15, 40% June 15, nothing in September, 30% January 15, 2027 |
| 1099-K for app-based drivers | $600, any number of transactions (federal: $20,000 and 200) |
| Local | No local income tax, but city business taxes such as Los Angeles |
How California figures your tax
Your California return starts from federal adjusted gross income, so your Schedule C profit minus half your self-employment tax carries straight over. California then subtracts its own standard deduction, $5,706 for a single filer on the Franchise Tax Board's 2026 estimated-tax worksheet, and applies the rate schedule. California has no self-employment tax of its own, and it does not conform to the federal qualified business income deduction, so that deduction does not exist on the California side either.
The FTB had not posted a 2026 rate schedule when we checked. This is the 2025 single-filer schedule, the latest official one:
| Taxable income | Rate |
|---|---|
| Up to $11,079 | 1% |
| $11,079 to $26,264 | 2% |
| $26,264 to $41,452 | 4% |
| $41,452 to $57,542 | 6% |
| $57,542 to $72,724 | 8% |
| $72,724 to $371,479 | 9.3% |
| $371,479 to $445,771 | 10.3% |
| $445,771 to $742,953 | 11.3% |
| Over $742,953 | 12.3% |
Only taxable income above the deduction is taxed, and the low bands are narrow but cheap, so a typical gig income stays well under the 9.3% band.
Worked example: a single full-time delivery driver
Gross gig income $52,000 including $6,000 of tips, 6,500 business miles January to June and 7,000 July to December, and $1,100 of other expenses. The federal engine gives net profit $40,867.50 and adjusted gross income $37,980.30. Subtract the $5,706 standard deduction and California taxable income is $32,274.30.
- California tax from the 2025 schedule: $654.90, an effective rate of 1.72% of AGI (before the personal exemption credit and any other credits, so the real bill can be a little lower)
- Federal income tax after the $6,000 tips deduction: $1,276.51
- Self-employment tax: $5,774.39
- Total tax: $7,705.80, or 14.8% of gross income to set aside
The tips deduction lowers the federal line only. California taxed the same $6,000 of tips because it never sees the deduction. If you earn more, the rate climbs: the 9.3% band does not start until taxable income passes $72,724.
Estimated payments, the California way
The Franchise Tax Board's 2026 instructions say you generally must make estimated payments if you expect to owe at least $500 ($250 if married filing separately) after subtracting withholding and credits, and your withholding and credits will be less than the smaller of 90% of your 2026 tax or 100% of your 2025 tax. If your 2025 California AGI was over $150,000 ($75,000 if married filing separately), the prior-year option rises to 110%, and at $1,000,000 of AGI it disappears.
The installments are not equal. They are due April 15, June 15, and January 15, 2027, at 30%, 40%, and 30% of the required annual amount. The third period, normally September 15, has no installment. For the driver above, a full-year California payment of $654.90 would be $196.47, $261.96, nothing, and $196.47. Meanwhile the federal estimate is still four quarters, so a California driver's calendar has a payment in September for the IRS only. Our guide to paying quarterly estimated taxes covers the federal side.
Pay through FTB Web Pay, which lets you schedule payments up to a year ahead. Once any single estimated or extension payment goes over $20,000, or a return shows more than $80,000 of tax, every later payment must be electronic or a 1% penalty applies. Filing your return by January 31 with the full balance paid lets you skip the last installment.
Tips, and what California does not copy
The FTB's summary of federal income tax changes marks the federal tips deduction "No" for conformity, along with overtime and car-loan interest. California's 2025 conformity law, SB 711, moved the conformity date to January 1, 2025, but the tips deduction was enacted in July 2025, after that date. Bills such as AB 1550 and SB 984 would add a state deduction; the FTB has published analyses of both, and we found no enacted version. Until that changes, plan on paying California tax on every tip dollar.
Contractor status, only as it affects your tax
Under Business and Professions Code section 7451 (Proposition 22), a rideshare or delivery driver for an app-based company is an independent contractor if the company does not set required hours, require particular rides or deliveries, or restrict you from working for others. The California Supreme Court upheld that part of the measure in July 2024. For your taxes, this is why you receive a 1099 and file a Schedule C.
Forms differ from the federal rule. For federal returns the 1099-K threshold is $20,000 and more than 200 transactions, but the FTB states the $600 threshold still applies to app-based drivers for California purposes. The 1099-NEC threshold follows the federal figure of $2,000 for 2026. Our 1099 thresholds guide explains how to reconcile a form with your own totals.
City business tax: Los Angeles as the main example
California has no local income tax, but many cities charge a business tax on anyone operating a business there. The Los Angeles Office of Finance says that, under state Senate Bill 182, rideshare drivers need only register in the city where they live, and only if they drove more than 30 days in the prior calendar year. Its page for the self-employed adds that a person with a business address outside the city who works in Los Angeles for seven days or more in a calendar year is considered a business that must register. Small businesses with $100,000 or less of worldwide gross receipts can be exempt, but only if they are registered and renew on time. Delivery drivers are not named in the rideshare answer, so ask the Office of Finance which rule applies to you; other cities have their own rules.
General information for tax year 2026, not tax advice. We checked the sources below on October 11, 2026.
To compare with other states, the Arizona guide covers a flat-rate state that follows the tips deduction, and the Texas guide covers a state with no income tax.
Frequently asked questions
Does California tax my delivery and rideshare tips?
Yes. The Franchise Tax Board says California does not conform to the federal deduction for tips, so tips are taxed on your California return even if you deduct them on your federal return. California starts from federal adjusted gross income, and the federal tips deduction is taken after that line, so it never reaches your California return. Bills to add a California tips deduction have been introduced, but we found no enacted law.
Does Proposition 22 mean I am an employee for tax purposes?
No. Business and Professions Code section 7451 treats an app-based driver as an independent contractor when the company meets its conditions, and in Castellanos v. State of California (2024) the California Supreme Court held that section 7451 does not conflict with the constitutional provision on workers compensation. For tax, that means you report income on Schedule C, pay self-employment tax, and receive a 1099 instead of a W-2.
I only drive part time. Do I need California estimated payments?
The FTB says you generally must pay estimates if you expect to owe at least $500 for the year ($250 if married filing separately) after withholding and credits, and your withholding and credits will be less than the smaller of 90% of this year's tax or 100% of last year's. If you expect to owe less than $500, you can pay with your return.
Why is there no September payment?
California's installments are 30%, 40%, 0%, and 30%. The FTB still prints a September 15 voucher, but the instructions say no installment is due for the third period. The federal system is different: it still expects four roughly equal payments.
Will Uber or DoorDash send me a 1099-K for $600?
If you are an app-based driver, possibly. For the federal return the threshold is back to $20,000 and more than 200 transactions, but the FTB says the $600 threshold still applies to 1099-K forms for payments to app-based drivers for California purposes, regardless of the number of transactions. Whether or not a form arrives, the income is taxable.
Do I need a Los Angeles business license?
It depends on where you live and drive. The Los Angeles Office of Finance says rideshare drivers who live in the city and drove more than 30 days in the prior calendar year need to register. For a self-employed person with a business address outside the city, working in Los Angeles seven days or more in a calendar year can create a registration requirement. Businesses with $100,000 or less of gross receipts can be exempt from the tax if they register and renew on time.
Which California tax table applies to the 2026 return?
The FTB had not posted a 2026 rate schedule when we checked, so this page uses the 2025 schedule, the latest official one. The rates have been stable for years, but the dollar bands move with inflation each year, so recheck when the 2026 booklet appears.
Sources
- California Franchise Tax Board, 2025 California Tax Rate Schedules (Schedule X)
- FTB, 2026 Instructions for Form 540-ES (thresholds, 30/40/0/30 installments, safe harbors, electronic payment rules, standard deduction on the worksheet) and 2026 Form 540-ES (payment vouchers and Web Pay)
- FTB, Summary of Federal Income Tax Changes: tips deduction (Public Law 119-21 section 70201) not conforming; qualified business income deduction not conforming
- FTB, 1099 guidance for recipients and Guide to information returns filed with California: $600 app-based driver 1099-K threshold
- FTB bill analyses: AB 1550 and SB 984 (proposed tips deductions; check bill status on leginfo.legislature.ca.gov)
- California Business and Professions Code, section 7451; California Supreme Court, Castellanos v. State of California (S279622, July 25, 2024)
- Los Angeles Office of Finance, Tax liabilities for rideshare drivers, Self-employed (1099), and Small business exemption FAQ
- IRS, What the "No Tax on Tips" deduction means for you (federal deduction); federal figures from our methodology page