GigMoney Playbook

Made Less Than $600 (or $2,000) on DoorDash or Uber? You May Still Owe Tax (the $400 Rule)

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Educational only, not tax advice. GigMoney Playbook explains general IRS rules in plain English. The author is not a CPA, enrolled agent, attorney, financial advisor, or tax preparer. The examples below are hypothetical, and your numbers will be different. Read our full disclaimer.

Last updated: October 24, 2026. All figures checked against IRS.gov and SSA.gov on that date.

“If you made less than $600, you don’t have to report it.” It’s a common line in driver forums, and it mixes up two rules. The $600 figure was about when a company has to send you a tax form, not whether you owe tax. For money paid in 2026, that form threshold isn’t even $600 anymore. Here’s the rule that actually matters for small gig earnings, the $400 self-employment rule, with hypothetical examples.

Quick answer: Gig income is taxable whether or not you get a 1099 (IRS Gig economy tax center). If your net earnings from self-employment are $400 or more, you generally have to file a federal return and pay self-employment tax, even if the gig is a side job (IRS: Manage taxes for your gig work). Because of how net earnings are figured, that works out to roughly $433.14 of net profit after expenses such as mileage.

Where the “$600 rule” came from, and why it’s now $2,000

Businesses that pay independent contractors file information returns, such as Form 1099-NEC, to report those payments to the IRS. For payments made before 2026, the 1099-NEC threshold was $600. For payments made in 2026, it’s $2,000, and after 2026 it will be adjusted for inflation (IRS: Am I required to file a Form 1099?). The 2026 instructions tell payers to file a 1099-NEC for anyone paid “at least $2,000” for services (Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026)). The change came from Section 70433 of the 2025 budget law, Public Law 119-21 (Public Law 119-21; IRS Pub. 1099 (2026)).

Some gig payments are reported on Form 1099-K instead. Payment apps and online marketplaces generally only have to send one when you receive more than $20,000 and more than 200 transactions in a year (IRS: Understanding your Form 1099-K). We cover that in detail in The 1099-K threshold is back to $20,000.

Put together, a lot of part-time drivers won’t get any 1099 for 2026. That doesn’t change what they owe. The IRS says you must report all income “even if you don’t receive Forms 1099” (IRS: Manage taxes for your gig work), and that the 1099-K threshold “doesn’t affect whether payments are taxable or whether a tax return must be filed” (IRS Fact Sheet 2025-08, Q7).

The rule that actually matters: $400 of net self-employment earnings

The IRS’s Form 1040 instructions list “net earnings from self-employment of at least $400” as one of the situations where you must file a return, no matter what your other income is (Form 1040 instructions, Chart C). The same $400 line decides whether you owe self-employment (SE) tax: “You must pay SE tax if you had net earnings of $400 or more as a self-employed person” (Instructions for Schedule SE).

SE tax is 15.3%: 12.4% for Social Security and 2.9% for Medicare (IRS: Self-employment tax). It’s the tax an employer would split with you on a W-2 job. As a contractor, you pay both halves.

“Net earnings” isn’t your gross pay, or even your profit

There are two steps between what the app paid you and the $400 test:

  1. Subtract business expenses to get net profit (Schedule C). For most drivers, the biggest one is mileage: 72.5¢ per business mile for January 1 – June 30, 2026, and 76¢ for July 1 – December 31, 2026 (IRS Standard mileage rates).
  2. Multiply net profit by 92.35%. Schedule SE, line 4a, does this, and line 4c says that if the result is less than $400, “stop; you don’t owe self-employment tax” (Schedule SE (Form 1040)).

So the dividing line in net-profit terms is $400 ÷ 0.9235 ≈ $433.14. That’s our arithmetic, not an IRS-published figure. The newest Schedule SE is the 2025 version; the 2026 form isn’t out yet. If you’re right around this line, check the 2026 Schedule SE once it’s published.

For our full walk-through of how mileage turns gross pay into profit, see How much a DoorDash driver should set aside for taxes.

Three hypothetical drivers

These examples are hypothetical. The drivers aren’t real people. All three are single, take the standard deduction, use the standard mileage rate, and claim no other expenses or credits.

Line Driver A Driver B Driver C
Other income None None $45,000 W-2 job
2026 gig earnings (gross, tips included) $520 $1,200 $1,200
Business miles 150 (before July 1) 500 (after July 1) 500 (after July 1)
Mileage deduction $108.75 $380.00 $380.00
Net profit $411.25 $820.00 $820.00
× 92.35% = net SE earnings $379.79 $757.27 $757.27
Over $400? No Yes Yes
SE tax (15.3%) $0 $115.86 $115.86
Extra federal income tax from the gig $0 $0 About $73.16
Federal tax from the gig $0 $115.86 About $189.02
1099-NEC required for 2026? No (under $2,000) No (under $2,000) No (under $2,000)

How the numbers work:

  • Driver A made less than $600 and also landed under the $400 line after mileage, so there’s no SE tax. A’s total income is far below the $16,100 single standard deduction for 2026 (IR-2025-103), so A owes no income tax on it either. A may not have to file at all, unless another filing rule applies (see the next section).
  • Driver B also never gets a 1099, but net SE earnings of $757.27 are over $400. B must file a return with Schedule SE and owes $93.90 Social Security plus $21.96 Medicare tax = $115.86. B has no income tax because B’s income is under the standard deduction.
  • Driver C has the same gig numbers plus a W-2 job, so the gig profit is also hit by income tax. Half of SE tax ($57.93) is deductible, leaving $762.07. The qualified business income (QBI) deduction takes 20% of that, or $152.41 (IRS QBI page). The new $400 minimum QBI deduction doesn’t apply because it requires at least $1,000 of QBI (Form 1040-ES (2026)). The remaining $609.66 is taxed at 12%, because C’s wages alone ($45,000 − $16,100 = $28,900 taxable) already sit in the 12% bracket ($12,400 – $50,400) (2026 Tax Rate Schedule X). That’s $73.16.

The takeaway: the 1099 threshold and the tax rules are separate. Drivers B and C owe tax on money no company reported.

Under $400? Check these before you skip filing

Landing under the $400 line means no SE tax. It doesn’t automatically mean you can skip the return or leave the money off it:

  • You may have to file for another reason. Chart C of the 1040 instructions lists other triggers, such as owing certain special taxes, or having advance premium tax credit payments made for Marketplace health coverage for you or your family (Form 1040 instructions, Chart C). Your total gross income can also put you over the general filing threshold.
  • If you file, report the gig income. Gig work income is reported on Schedule C even when you didn’t get a 1099 (IRS: Manage taxes for your gig work). Being under $400 only affects SE tax. It doesn’t exclude the money from income tax.
  • W-2 workers with a small side gig are the ones most likely to owe a little income tax on tiny gig profits, like Driver C, because their wages already use up the standard deduction.

Why filing can work in your favor

  • Social Security credits. You earn credits from wages and self-employment income. In 2026, one credit takes $1,890 of covered earnings, and you can earn up to four a year ($7,560). Most people need 40 credits to qualify for retirement benefits (SSA: Social Security credits). SE tax you pay on gig profit counts toward this.
  • Refundable credits. Schedule C filers may qualify for credits like the Earned Income Tax Credit, which can reduce your tax or even produce a refund (IRS: Self-employment tax). You can only claim it by filing.

No 1099? How to figure your income yourself

  • Use the platform’s earnings records and save a copy of your yearly totals after December 31.
  • Count tips. Tips are income and are part of your SE earnings. Some delivery and rideshare tips may qualify for the new “no tax on tips” income tax deduction, but that deduction doesn’t reduce SE tax. Our DoorDash set-aside guide explains the details and limits (IRS: No tax on tips).
  • Keep a mileage log. The IRS expects a log, diary, or other written record of business miles (IRS Pub. 463). At small income levels, mileage is often what decides whether you land above or below $400.
  • Check every app. The $400 test uses your combined net earnings from self-employment, not each app separately. Schedule SE adds up all your Schedule C net profit on line 2 (Schedule SE). $300 from one app and $300 from another can put you over the line.

Do small earners need quarterly payments?

Usually not at these amounts. Estimated payments are generally required only if you expect to owe at least $1,000 for the year after withholding and refundable credits (Form 1040-ES (2026)). If you also have a W-2 job, you can cover a small gig’s tax by raising your paycheck withholding instead (IRS: Manage taxes for your gig work). If your side income is growing, read our quarterly estimated taxes guide. If you already fell behind, see Missed a quarterly estimated tax payment? What to do next.

State and local taxes follow their own rules, so check your state’s tax agency too.

Tracking miles? Our 2026 Mileage Log ($8, sold on Etsy) makes it easy to log trips and total your deduction. It’s an educational tool, not tax advice.

FAQ

Do I have to report DoorDash income under $600?

If you’re filing a return, yes. All gig income is reportable whether or not you get a 1099 (IRS Gig economy tax center). Whether you have to file depends on the $400 net SE earnings rule and the other filing rules in the Form 1040 instructions.

Will DoorDash or Uber send me a 1099 if I made under $2,000 in 2026?

A payer isn’t required to send a 1099-NEC for 2026 payments under $2,000 (1099-MISC/NEC instructions), and a payment app or marketplace isn’t required to send a 1099-K unless you top $20,000 and 200 transactions (IRS). Platforms can still choose to send forms below those thresholds. Either way, the form doesn’t change what you owe.

Is the $400 based on gross earnings?

No. It’s based on net earnings from self-employment: your profit after business expenses, multiplied by 92.35% (Schedule SE).

I made $500 and drove a lot of miles. Do I owe anything?

Possibly nothing. If your mileage and other expenses bring net profit under about $433.14, your net SE earnings are under $400 and you don’t owe SE tax. You may still owe income tax if you have other income, as Driver C shows above.

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