Taxi and Rideshare Drivers and Chauffeurs

TTOC 802 is the three-digit Treasury Tipped Occupation Code Treasury assigned to Taxi and Rideshare Drivers and Chauffeurs in 26 CFR §1.224-1. The 800s Transportation and Delivery category groups it with Parking and Valet Attendants (801), Shuttle Drivers (803), Goods Delivery People (804), Personal Vehicle and Equipment Cleaners (805), Private and Charter Bus Drivers (806), Water Taxi Operators and Charter Boat Workers (807), Rickshaw / Pedicab / Carriage Drivers (808), Home Movers (809), and Gas Pump Attendants (810).

TTOC 802 in practice covers: Uber drivers (UberX, UberXL, Uber Black, Uber Comfort), Lyft drivers (Standard, Shared, Lux), traditional taxi-fleet drivers paid on commission or salary, livery-service drivers paid on commission, private-chauffeur drivers employed by family offices or executive transport companies, and any other driver primarily transporting passengers for compensation in a vehicle the driver operates.

Goods-delivery drivers (DoorDash, Uber Eats, Grubhub, Instacart, Amazon Flex, FedEx Ground contractors, USPS rural carriers in some configurations) belong in TTOC 804 — Goods Delivery People, not TTOC 802. Pick the code that matches your dominant role; some drivers will hold both codes if they split between rideshare and food delivery for the same platform group.

Uber, Lyft, and most rideshare platforms classify drivers as independent contractors. Drivers receive a Form 1099-K from the platform reporting gross fare receipts (and tips, if the platform breaks them out separately, which most do). They do not receive a W-2 from the platform. Their tax filing path is Schedule C (sole proprietor) plus Schedule SE (self-employment tax) plus the regular Form 1040.

Traditional taxi-fleet drivers in many cities are W-2 employees of the fleet operator (Yellow Cab, taxi-medallion lessees, some airport-shuttle services). Chauffeurs employed by an executive-transport company or a family office are typically W-2. Drivers in these arrangements should see Box 14b TTOC 802 on their tax year 2026 W-2 and a Box 12 code TP figure for cash tips reported to the employer.

The §224 deduction is available to both groups — the statute does not distinguish between employees and self-employed individuals for eligibility purposes. The §224(b)(1) cap of $25,000 per year applies to both groups. The MAGI phase-out under §224(b)(2) applies to both groups identically.

What differs is the reporting mechanic. W-2 drivers file Schedule 1-A using the cash-tip figure from Box 12 code TP (or, for tax year 2025 specifically, from W-2 lines 1 and 7 under the Notice 2025-69 §3 transition relief). 1099-K drivers file Schedule 1-A using the cash-tip figure from their own books — the platform's tip line, plus any cash tips received in-vehicle (less common with cashless rideshare), plus chauffeur cash gratuities.

1099-K rideshare drivers ordinarily deduct vehicle expenses on Schedule C — typically using the IRS standard mileage rate, which for tax year 2025 is published in IRS Notice 2024-79 (or the equivalent 2025 update; check the IRS standard-mileage page for the current year's rate). The standard mileage rate is meant to substitute for the costs of operating the vehicle (gas, oil, depreciation, repairs, insurance, registration). It does not interact with the §224 deduction.

The §224 deduction is computed from gross cash tips, not from net Schedule C income. So a rideshare driver with $40,000 in fare income, $8,000 in tips, and $24,000 in mileage deduction (yielding $24,000 of net Schedule C income) takes the §224 deduction on the $8,000 tip figure — not on the $24,000 net figure. The two deductions are stacked, not netted.

What this means in practice: the §224 deduction is most valuable for drivers whose tip share is high relative to fare income. A driver with $50,000 in fares and $2,000 in tips gets a $2,000 §224 deduction (subject to the cap and phase-out). A driver with $30,000 in fares and $10,000 in tips gets a $10,000 §224 deduction (subject to the same cap and phase-out).

The Self-Employment Tax interaction is the other moving part. The §224 deduction is above-the-line (it reduces AGI), but it does not reduce the Schedule SE base — Schedule SE is computed on net Schedule C income before the §224 deduction. So a 1099-K driver still pays Self-Employment Tax on the underlying income; the §224 deduction reduces income tax, not SE tax.

For tax year 2026, W-2 taxi-fleet drivers and chauffeurs should see Box 14b TTOC 802 on their W-2. Box 12 code TP should carry the dollar figure for cash tips reported to the employer. Box 12 code TT may carry qualified overtime if the driver is paid on an hourly schedule that crosses 40 hours per week — uncommon in fleet driving, more common in chauffeur arrangements with long-haul trips.

For tax year 2025 specifically, the Box 14b reporting requirement under §6051(a)(18) is waived under IRS Notice 2025-69 §3. The deduction on the tax year 2025 return is computed from cash tips reported on Form W-2 lines 1 and 7. From tax year 2026 onward, Box 14b TTOC 802 is the canonical proof.

If your W-2 shows TTOC 000 in Box 14b and you drove a taxi or limo for the year, request a Form W-2c. Some payroll systems default transportation SOC codes incorrectly; the final regulation explicitly lists drivers as TTOC 802.

1099-K rideshare drivers don't get a W-2 with Box 14b. The Schedule 1-A computation runs from the driver's own books. The platform's tax-summary page (for Uber, the Tax Summary export; for Lyft, the Driver Dashboard's annual summary) breaks down gross fares, tips, fees, and toll passthroughs.

The tip line on the platform tax summary is the starting point for §224 computation. If the platform reports tips as a separate line item (most do), that figure is the cash-tip wages for §224. If the platform lumps fares and tips together (some platforms in some configurations do), the driver needs to break out the tips from the platform's transactional records.

Cash tips received in-vehicle are rare in modern rideshare but real. If passengers occasionally hand cash to the driver, that cash is a qualified tip under §1.224-1(b) — it should be added to the §224 figure even though it's not on the platform's tax summary.

Chauffeur cash gratuities are common in private-livery arrangements. If you drive for a chauffeur company that pays you a flat hourly rate plus customer-handed cash gratuities, the cash gratuities are qualified tips — but only if the chauffeur is a W-2 employee receiving the cash. If the chauffeur is a 1099-NEC contractor receiving the cash, it's Schedule C income; the §224 deduction still applies but uses the contractor's own books.

Mistake one: confusing 1099-K with 1099-NEC. Rideshare platforms issue 1099-K (gross third-party network transaction reporting). Some chauffeur services issue 1099-NEC (non-employee compensation). Both flow to Schedule C, but the line on the form differs and the documentation expectations differ.

Mistake two: not separating tips from fares. The §224 deduction needs the tip figure specifically. Drivers who treat all platform earnings as one line lose the ability to compute the deduction correctly. Pull the tip break-down from the platform tax summary before the year ends.

Mistake three: missing in-vehicle cash tips. Cashless rideshare doesn't mean cashless universally — passengers occasionally hand cash for service above and beyond. A simple log (date, amount, ride ID) is enough; the §224 deduction is computed from cash tips received whether through-platform or in-person.

Mistake four: Box 14b 000 on a chauffeur W-2. Some payroll providers don't recognize chauffeur SOC codes as TTOC-eligible; they emit Box 14b 000 by default. Form W-2c is the remedy.

Mistake five: trying to take the §224 deduction on Self-Employment Tax. The §224 deduction is above-the-line for income tax purposes. It does not reduce the SE-tax base. Don't double-count.

Drivers who filed a tax year 2025 return without the §224 qualified-tips deduction — most commonly because the original software didn't support Schedule 1-A for the 1099-K Schedule C path — have through approximately April 15, 2029 to amend under §6511(a) for a return filed by the standard April 15, 2026 deadline.

Form 1040-X with Schedule 1-A is the path. For W-2 drivers, the cash-tip figure comes from W-2 lines 1 and 7. For 1099-K drivers, the cash-tip figure comes from the platform tax summary plus any logged in-vehicle cash tips.

The §224 deduction is not retroactively limited to one type of driver. If you drove rideshare in 2025 and missed the deduction, the amend is straightforward. Drivers with multiple platforms (Uber Eats and Uber simultaneously, for example) split the tip figure across the right TTOCs (804 vs 802) on the original Schedule 1-A or on the amend.

See /amend-prior-year for the full Form 1040-X walkthrough.