TTOC Codes for Delivery and Rideshare Drivers: 2025–2026 Tax Rules

Taxi and rideshare drivers and chauffeurs are TTOC 802, and goods delivery people are TTOC 804. Both occupations are on the Treasury list, so their qualified tips can be deductible under No Tax on Tips (up to $25,000 a year for 2025–2028). How tips are reported depends on whether you're an employee or self-employed.

Transportation & Delivery TTOC codes

Full list: ttoccodes.com/codes .

Employee drivers

If you're on payroll (for example, a restaurant's delivery driver), report cash tips (including app tips) to your employer by the 10th of the following month when they reach $20 or more in a month. Your employer withholds tax and includes the tips on your W-2. Starting with 2026 forms, the employer reports total cash tips in Box 12 with code TP and your TTOC (for example, 804) in Box 14b (irs.gov/instructions/iw2w3).

Self-employed rideshare and delivery drivers

Most app-based drivers are independent contractors. Tips are generally business income reported on Schedule C and are subject to self-employment tax. Self-employed workers aren't subject to the employee tip-reporting rules, but they must keep records that support the qualified tips they claim (irs.gov/…/tip-recordkeeping-and-reporting).

• The deduction applies to qualified tips shown on Forms 1099-NEC, 1099-MISC, or 1099-K, or otherwise substantiated.
• The deduction can't exceed your net income from the driving business, figured before this deduction.
• Tips received in a specified service trade or business are excluded, but the IRS has provided transition relief for occupations on the Treasury list.

No Tax on Tips rules for drivers

• Deduct up to $25,000 of qualified tips per year, for tax years 2025 through 2028.
• The deduction phases out once modified adjusted gross income (MAGI) is over $150,000, or $300,000 on a joint return.
• Qualified tips are voluntary cash or charged tips from customers, including tips received through tip sharing. Mandatory service charges don't count.
• The occupation must be on the IRS list of occupations that customarily and regularly received tips on or before December 31, 2024.
• You need a valid Social Security number, and married taxpayers must file jointly.
• It is available whether you itemize or take the standard deduction. You claim it on Schedule 1-A (Form 1040).
• It reduces federal income tax only. Social Security and Medicare taxes (7.65% for employees) still apply to tips.

Example: a self-employed rideshare driver has $9,000 of tips and $14,000 of net profit on Schedule C. They can deduct the full $9,000 on Schedule 1-A, because it's under both the $25,000 cap and their net business income. They still owe self-employment tax on their net profit, tips included.

This article is general information, not tax advice. Rules can change; confirm your situation with the current IRS instructions linked above or a tax professional.