Solved: I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?
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I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?

I am registered in Lexington KY as a Lyft driver but had rides that initiated in neighboring Indiana and Ohio. Do I file state taxes there too?

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Expert Alumni

I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?

Your business location is your resident state, all income derived from this business is taxable to your resident state.  The fact that your Lyft business initiates riders from neighboring states would not necessarily require you to pay tax in that neighboring state. 

Because each state has their own specific rules it's best to check with Lyft for more guidance.  However, if there would be a requirement to report in each of the nonresident states, it would be the net profit (income reduced for expenses) that would be prorated for each state.  You would prepare the nonresident state returns first.

Your resident state would give your credit for taxes paid to another state on the same income, eliminating double taxation.  There will be a question in the resident state return about the credit.  Prepare your resident state last.

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3 Replies
Expert Alumni

I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?

Your business location is your resident state, all income derived from this business is taxable to your resident state.  The fact that your Lyft business initiates riders from neighboring states would not necessarily require you to pay tax in that neighboring state. 

Because each state has their own specific rules it's best to check with Lyft for more guidance.  However, if there would be a requirement to report in each of the nonresident states, it would be the net profit (income reduced for expenses) that would be prorated for each state.  You would prepare the nonresident state returns first.

Your resident state would give your credit for taxes paid to another state on the same income, eliminating double taxation.  There will be a question in the resident state return about the credit.  Prepare your resident state last.

View solution in original post

New Member

I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?

Thank you!  A bit confusing because I'm not a tax professional but definitely provided me an answer.
Expert Alumni

I drove for Lyft based out of one city only but physically accepted rides in two different states. Do i file state taxes for those states too?

@naturallyliz  Your welcome!  State returns can be a bit confusing especially in your situation.
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