If you are an Uber or Lyft driver in the State of California, you may be wondering how to report your ridesharing income on your taxes. 

Under federal law, qualified transportation benefits are excluded from gross income with monthly limits for parking and transit passes and commuter highway vehicle benefits (see table in federal section).  California places no monthly limits for the exclusion on these benefits and California’s definitions are more expansive. Therefore, income that was includible for federal purposes may be excludable from state income, in which case the W-2 wages for federal and state will not be the same. California has not conformed to the TCJA change that prevents employers from deducting the costs of transportation fringe benefits provided to their employees.