Do you work in a flexible or temporary job such as driving for a rideshare company, making deliveries, or providing a creative service? If so, check out the information on this page to learn more about how working these “gig” jobs may impact your North Carolina taxes.

What is the Gig Economy?

The gig economy, also known as the sharing economy or access economy, refers to activities where people earn income providing on-demand work, services, or goods.

It is common for the activity to be organized through a digital platform, such as a phone app or a website.

What are some examples of jobs in the Gig Economy?

Much of the activity in the gig economy involves temporary, flexible jobs. Individual are often independent contractors and freelancers. Sample activities include:

• Driving a car for booked rides or making deliveries

• Renting out property

• Running errands or completing tasks

• Selling goods online

• Providing creative or professional services

Is income earned while doing gig work taxable?

Yes, you must report income earned from your gig work on your tax return, even if the income is:

• From part-time, temporary, or side work

• Paid in a form other than cash such as property, goods, or virtual currency

• Not reported on an informational statement like a Form 1099, W-2, or similar statement

Do I have to make Estimated Tax Payments as a gig worker?

If you earn money for gig work as an independent contractor, you may have to pay quarterly estimated taxes to the IRS and the NC Dept. of Revenue. If you had gig work in the last year or if you are just starting out, review the NC-40 Worksheet Instructions and the Individual Income Tax Estimator to help estimate your North Carolina Individual Income Tax liability.

What if I have another job as an employee and do gig work on the side?

If you work as an employee and also do gig work, you may avoid making estimated tax payments on your gig income by having your employer withhold more State tax from your employee paycheck. Review Form NC-40 to determine your amount of estimated tax and complete an NC-4 or NC-4EZ to increase the amount of tax withheld from our wages then give the completed form to your employer. If you do choose to increase the amount withheld instead of making estimated tax payments, it is important to make sure the balance due on your North Carolina individual income tax return will be less than $1,000 in order to avoid owing interest on the underpayment of estimated tax.

What records should I collect and keep from my gig work?

Recordkeeping can help track your income, deduct expenses, and complete your tax return. For more information to help you get started with record keeping, review the IRS Publication 583, Starting a Business and Keeping Records.

What will I need to file my tax return?

Your first tax return after becoming a gig worker may involve more forms and information than you are used to. Make sure you review your state and federal filing requirements.

For further information on the gig economy, filing requirements, records, and estimated taxes check out these resources:

• IRS Gig Economy Tax Center
• North Carolina Estimated Income Tax
• NCDOR: Tax Resource Library