Are Tolls Tax Deductible? (2026)

Yes — business tolls are deductible on Schedule C whether you use the standard mileage rate or the actual expense method. Tolls are one of the very few vehicle costs that are not baked into the IRS’s per-mile rate, which means you get to claim them on top of your mileage deduction. Personal commuting tolls, however, are not deductible, and W-2 employees are essentially locked out of the deduction on their federal return after the One Big Beautiful Bill Act (OBBBA) made the disallowance of unreimbursed employee expenses permanent.

Key takeaways

• Business-related parking fees and tolls are deductible in addition to the 2026 standard mileage rate of 72.5¢/mile (Notice 2026-10; Rev. Proc. 2019-46 §4.03).
• IRS Publication 463 says it plainly: “In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls.”
• Tolls paid to get to your regular workplace are nondeductible commuting expenses (Treas. Reg. §1.262-1(b)(5)).
• Most practitioners put tolls on Schedule C, Line 9 along with car and truck expenses; the 2025 Schedule C instructions explicitly tell you to “add to this amount your parking fees and tolls.”
• E-ZPass / SunPass / FasTrak / I-Pass / Peach Pass account statements are gold-standard §274(d) substantiation.
• W-2 employees: business tolls are not deductible on your federal return. OBBBA §70110 made the TCJA suspension of miscellaneous itemized deductions permanent.

The bottom line: tolls sit alongside both methods

Self-employed drivers have two ways to deduct vehicle costs: the standard mileage rate or the actual expense method. The two systems normally don’t mix — if you use the standard mileage rate, you can’t separately deduct gas, oil, insurance, or registration, because those are baked into the per-mile rate.

Tolls (and parking) are the exception. From IRS Topic No. 510: other car expenses for parking fees and tolls attributable to business use are separately deductible, whether you use the standard mileage rate or actual expenses.

In plain English: a self-employed driver who claims 10,000 business miles in 2026 takes a $7,250 mileage deduction (10,000 × $0.725) plus every business-related toll they paid that year. The toll deduction is not double-counted, because the standard mileage rate does not assume any toll exposure — it’s built from fuel, depreciation, maintenance, insurance, and registration data, not toll data.

The §162 framework

Tolls aren’t deductible because the tax code lists “tolls” anywhere. They’re deductible because of the general rule in IRC §162(a): a taxpayer may deduct “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.”

A toll paid on the way to a passenger pickup, a job site, a client meeting, or a delivery stop is ordinary (every driver pays them) and necessary (you can’t get to the work without crossing the bridge). That clears §162.

The other side of the equation is IRC §262, which disallows any deduction for “personal, living, or family expenses.” Tolls on your commute, your kid’s soccer practice, and your trip to Costco all live here. The job of a clean mileage log is to keep §162 tolls separate from §262 tolls.

Why tolls are separately deductible (Pub. 463 + Rev. Proc. 2019-46)

The clearest authority is IRS Publication 463, the IRS’s own guide on travel, gift, and car expenses. The relevant passage on parking and tolls reads: “In addition to using the standard mileage rate, you can deduct any business-related parking fees and tolls.”

The mechanics behind that sentence come from Rev. Proc. 2019-46 §4.03, which is the operative IRS guidance on the standard mileage rate: a taxpayer may deduct, as separate items, parking fees and tolls attributable to use of the automobile for business purposes.

The same Rev. Proc. lists what is bundled into the rate — depreciation or lease payments, maintenance and repairs, tires, gasoline (including all taxes thereon), oil, insurance, and license and registration fees. Tolls and parking are conspicuously not on that list. That’s by design.

The commuting trap

Here’s where most articles go quiet and audits get loud. Tolls on your commute to a regular workplace are not deductible. Treas. Reg. §1.262-1(b)(5) is direct: the taxpayer’s costs of commuting to his place of business or employment are personal expenses and do not qualify as deductible expenses.

The IRS treats commuting as inherently personal — it reflects “the inherently personal choice of where to live” (Commissioner v. Flowers, 326 U.S. 465 (1946)). The fact that you happen to cross a $14 bridge to get to your office doesn’t change that.

Rev. Rul. 99-7 carves out three exceptions where home-to-work transportation (and the tolls attached to it) can be deducted:

1. Daily transportation between your residence and a temporary work location outside the metropolitan area where you live and normally work.
2. Daily transportation between your residence and a temporary work location in the same trade or business — regardless of distance — if you have one or more regular work locations away from your residence.
3. Daily transportation between your residence and another work location if your residence is your principal place of business under §280A(c)(1)(A).

A “temporary” location is one where you reasonably expect to work for one year or less, and where you actually work for one year or less.

For many gig drivers, exception (3) does the heavy lifting: if your home office is genuinely your principal place of business — where you handle scheduling, accounting, and dispatch — then the toll you pay to cross a bridge on your first business run of the day is a deductible business toll, not a commute. See the IRS Commuting Rule explainer for the deeper walkthrough.

Where tolls go on Schedule C

There’s no single right answer, and the IRS doesn’t really care which line you use as long as the number ends up in the business section. Two common approaches:

Either approach is acceptable. What’s not acceptable is double-counting (deducting tolls on Line 9 and Line 27a) or burying them inside an actual-expense-method calculation in a way that’s not traceable.

Substantiating tolls under §274(d)

IRC §274(d) is the strict-substantiation statute that governs travel and vehicle expenses. To deduct a toll, you must be able to show four things:

1. Amount of each toll
2. Time (date paid)
3. Place (which crossing or toll road)
4. Business purpose (which trip or client the toll was for)

The Tax Court applies this strictly. In Dasent v. Commissioner, T.C. Memo. 2018-202, the court refused to allow a deduction for “$320 for parking fees, tolls, and transportation,” holding that the car and truck expenses are subject to the strict substantiation rules of §274(d) and thus they cannot be estimated. Even receipts standing alone were not enough to prove business connection. The pattern repeats in Velez v. Commissioner (T.C. Memo. 2018-46), Garza v. Commissioner (T.C. Memo. 2014-121), and Patitz v. Commissioner (T.C. Memo. 2022-99): contemporaneous records — not after-the-fact reconstructions — are required.

The good news: for almost every transponder in America, you already have what you need. Log into your E-ZPass, SunPass, FasTrak, I-Pass, Peach Pass, or NC Quick Pass account and download the monthly or annual statement. It lists every charge with date, time, plaza, and amount. Pair that statement with your mileage log and you’ve satisfied §274(d).

Cash tolls are the weak link. Paper receipts get lost; cash crossings often produce no receipt at all. If you’re driving in a state with cash booths, snap a photo of the receipt or note the charge in your mileage tracker the same day.

W-2 employees: the OBBBA §70110 lockout

If you receive a W-2 and your employer doesn’t reimburse you, the federal answer is grim. The Tax Cuts and Jobs Act (TCJA) suspended miscellaneous itemized deductions — including unreimbursed employee business expenses like tolls — for 2018 through 2025. OBBBA §70110 (signed July 4, 2025) made that suspension permanent by amending §67 to permanently disallow these deductions for tax years beginning after December 31, 2025.

Notice 2026-10 confirms this directly: §70110 of the OBBBA made permanent the disallowance for all miscellaneous itemized deductions that are subject to the two-percent of adjusted gross income floor under §67, including unreimbursed employee travel expenses.

If you’re a W-2 employee, your three options for getting toll dollars back are:

• An employer accountable plan reimbursement (Treas. Reg. §1.62-2). You substantiate, they reimburse, and the reimbursement is tax-free.
• You qualify as one of the four exceptions under §62(a)(2): Armed Forces reservist, fee-basis state or local official, qualified performing artist, or eligible educator.
• A state-level deduction. Massachusetts, for example, allows a personal-income-tax deduction for E-ZPass tolls under M.G.L. ch. 62 §3(B)(a)(15) — qualifying commuter amounts above $150 per year, capped at $750 per person — even when the federal return blocks them. Check your state.

If you drive both W-2 and 1099 (say, your day job plus weekend rideshare), only the tolls connected to your self-employment activity belong on Schedule C.

NYC congestion pricing: the 2025–2026 story

The Manhattan Central Business District Tolling Program went live on January 5, 2025, after a long political fight. For passenger vehicles entering Manhattan south of and including 60th Street, the 2026 toll structure (with E-ZPass) is $9 during peak hours (5 a.m.–9 p.m. weekdays, 9 a.m.–9 p.m. weekends) and $2.25 overnight, charged once per day. Tolls-by-Mail rates are exactly 50% higher than E-ZPass rates.

Important wrinkle for rideshare and black-car drivers: for-hire vehicles are not charged the $9 daily passenger toll. Under the MTA’s Congestion Relief Zone toll schedule, the per-trip charge for high-volume for-hire vehicles is $1.50, and for taxis, green cabs, and black cars the per-trip charge is $0.75. That means Uber and Lyft trips into the zone carry a $1.50 surcharge; yellow taxi and traditional black-car trips carry $0.75. These FHV surcharges are passed through to the rider in almost every case.

If you cross into the zone while driving your personal vehicle (not on a platform trip — say, to scout a delivery route, meet a client, or run a non-platform errand for the business), you pay the passenger-car rate. That’s a deductible business toll.

Drivers crossing one of the four “credit” tunnels (Lincoln, Holland, Queens-Midtown, or Hugh L. Carey) with E-ZPass during peak hours receive a credit of up to $3 against the congestion charge.

Toll reimbursements from platforms and employers

Treatment depends on whether the reimbursed amount runs through your 1099 gross income.

Uber and Lyft typically charge the rider a toll adjustment that flows through to the driver. On Uber’s tax summary, this appears as both “tolls” income and a separate toll expense line — practitioners correctly call it “a wash.” If the toll amount is included in your 1099-K gross, you deduct the toll. If it’s a pure pass-through that never hits your gross, you neither report it nor deduct it. Check your annual tax summary; don’t guess.

DoorDash is explicit that it does not reimburse tolls: DoorDash will not reimburse for tolls, parking fees (including tickets) or traffic tickets. Instacart, Uber Eats, Grubhub, and Walmart Spark generally take the same position. For delivery drivers, every toll you pay during a business shift is out-of-pocket — and deductible — as long as you’ve kept the records.

For W-2 employees, accountable-plan reimbursements (substantiated, returned-if-excess, paid through a compliant plan under Treas. Reg. §1.62-2) are tax-free and do not have to appear on your W-2.

Worked example 1 — Naomi, NYC rideshare driver

Naomi drives full-time for Uber and Lyft in New York City in 2026. Her numbers:

• Total miles: 32,000
• Business miles: 28,000 (87.5% business-use percentage)
• 2026 standard mileage rate: 72.5¢ → mileage deduction of $20,300

Tolls she paid out of pocket during shifts (not passed through to riders) — these come from her dead-head miles between fares and the occasional cross-river run home that she counts as business because her apartment is her principal place of business for the rideshare activity:

Tolls passed through to riders via Uber/Lyft (these appear on her 1099-K as part of gross fare and as a separate deduction on her platform tax summary) — about $3,400 in 2026. These wash out: she reports them as income and deducts them, with no net tax effect.

Schedule C presentation:

• Line 9 (Car and truck expenses): $20,300 mileage + $1,700 own-paid tolls = $22,000
• Tolls passed through via Uber/Lyft: separately deducted as part of platform fees, with the same amount included in 1099-K gross

The $1.50 per-trip FHV congestion surcharge does not hit Naomi’s wallet on platform trips — Uber bills it to the rider. She doesn’t deduct what she didn’t pay.

Worked example 2 — Levi, NJ real estate agent

Levi is a licensed real estate agent in Hoboken who travels to client showings, listing appointments, and inspections across central and southern New Jersey. He has a leased office in Hoboken where he meets clients three afternoons a week. His apartment is not his principal place of business.

2026 numbers:

• Business miles: 12,000
• Mileage deduction: 12,000 × $0.725 = $8,700

His E-ZPass annual statement shows $2,460 in total tolls. Breaking that down:

Schedule C Line 9: $8,700 + $1,840 = $10,540

The $620 of commuting tolls stays off the return. The discipline of separating the two categories on the E-ZPass statement — month by month, plaza by plaza — is the difference between a clean deduction and an audit problem. New Jersey’s 2026 toll increases (3% on the Turnpike and Garden State Parkway, plus an additional $0.25 on Port Authority crossings) make this exercise more valuable each year, not less.

Common mistakes

1. Thinking tolls are bundled into the mileage rate. They aren’t. Rev. Proc. 2019-46 §4.03 is explicit; they’re separately deductible.
2. Deducting commuting tolls. A bridge toll between your home and your regular office is a personal expense, period (Treas. Reg. §1.262-1(b)(5)).
3. Not separating business from personal tolls on the E-ZPass statement. Every audit defense starts here.
4. W-2 employees claiming tolls on a federal return. OBBBA §70110 closed that door permanently after 2025.
5. Tossing transponder statements. Without records that meet §274(d) — amount, time, place, business purpose — even legitimate tolls can be denied. Dasent is the cautionary tale.
6. Double-counting passed-through tolls. If Uber or Lyft already charged the rider and it never made it into your 1099-K gross, you don’t deduct it.
7. Skipping cash tolls. A cash toll is just as deductible as an E-ZPass charge — but only if you wrote it down the day you paid it.

The fix

Tolls are easy money if you keep the records and brutal money if you don’t. The transponder statement gets you 90% of the way — Dasent shows what happens to the other 10% when business purpose can’t be tied to each crossing.

EveryLastMile, an iOS mileage tracking app, runs in the background on your iPhone using on-device sensor fusion, classifies drives with a swipe, and exports a Pub. 463-compliant log that pairs cleanly with your E-ZPass / SunPass / FasTrak statement at year-end. $3.99/month or $39.99/year — deductible on Line 27a if you’re on standard, or rolled into your actual-expense calculations.

For the 72.5¢ rate itself and the Notice 2026-10 mechanics, see the 2026 IRS Mileage Rate deep dive. For the registration question, Are Vehicle Registration Fees Tax Deductible? (2026). For the insurance counterpart, Is Car Insurance Tax Deductible? (2026). For the home-to-first-stop question that drives your business-use percentage and decides whether your bridge toll is a commute or a business expense, The IRS Commuting Rule, Explained. For the §274(d) audit-response playbook, the Mileage Audit Defense Playbook. Platform-specific tax pillars: Delivery Driver Mileage Tax Guide 2026, Uber & Lyft Driver Mileage Tax Guide 2026, Walmart Spark Driver Tax Guide 2026, Instacart Driver Tax Guide 2026.

Frequently asked questions

Can I deduct tolls if I'm a W-2 employee?

Not on your federal return. OBBBA §70110 made the suspension of unreimbursed employee business expenses permanent. Your best move is to ask your employer for an accountable-plan reimbursement under Treas. Reg. §1.62-2.

Do I need an itemized E-ZPass statement, or is the year-end total enough?

Itemized. §274(d) requires amount, time, place, and business purpose — a single number for the year doesn't show place or business purpose, and the Tax Court denied the deduction in Dasent for exactly that reason.

What if I lose my paper toll receipts?

Download the statement from your transponder account. Almost every authority lets you pull at least a full year of activity online — E-ZPass, SunPass, FasTrak, I-Pass, Peach Pass, NC Quick Pass.

Do bridge tolls count?

Yes. Bridge tolls, tunnel tolls, highway tolls, and congestion charges are all "tolls" for §162 purposes.

Does the Uber or Lyft passed-through toll appear in my income?

If it's included in your 1099-K gross fare, yes — and you deduct an equal amount as a platform fee or toll expense. Check your annual tax summary line by line; the net effect is zero either way.

Is NYC congestion pricing deductible?

Yes, when paid for a business trip. It's a toll just like any other crossing. For-hire vehicles pay a $1.50 per-trip surcharge that's passed through to the rider, not the driver — so you don't deduct what you didn't pay.

What about car-rental tolls that the rental company bills me for?

Deductible to the extent the trip was business. Keep the rental company's toll invoice; it usually itemizes by plaza and date and satisfies §274(d) on its own.

What if I pay cash tolls?

Still deductible — but you bear the substantiation burden. Log the toll the same day in your mileage tracker so the date, place, and business purpose are contemporaneous, not reconstructed.