New York Mileage and Vehicle Tax Records (2026): IT-196, Bonus Depreciation, TNC Law and AV Rules
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
New York still lets itemizers deduct unreimbursed employee business expenses, including vehicle costs, on Form IT-196, even though federal law doesn't. It doesn't follow federal bonus depreciation (Form IT-398). Rideshare outside New York City falls under Vehicle and Traffic Law Article 44-B. Driverless testing needs a DMV permit with a driver seated.
New York's return starts from your federal numbers but keeps some deductions federal law dropped. This guide summarizes the state's published rules as of October 16, 2026.
The federal baseline every New York driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How New York treats vehicle deductions
A self-employed driver's Schedule C vehicle deduction generally flows into the New York return, which then applies additions and subtractions on Form IT-225. Depreciation is the main one for a vehicle.
Bonus depreciation
The Form IT-225 instructions say that, apart from resurgence zone and New York Liberty Zone property, New York State doesn't follow the federal depreciation rules for IRC Section 168(k) property placed in service on or after June 1, 2003. Federal bonus depreciation on a work vehicle is added back (modification A-209) and New York depreciation is figured on Form IT-398. See why business-use percentage matters.
Unreimbursed employee business expenses
If you itemize on your New York return, the 2025 Form IT-196 instructions let you deduct part of your unreimbursed employee business expenses. Line 21 takes the total from an unreimbursed employee business expenses worksheet whose first line is vehicle expenses from its Part 2. The instructions repeat that you can't deduct commuting and refer to a 2% limit on most employee business expenses. That's a state deduction with no federal match.
Rideshare (TNC) rules in New York
Vehicle and Traffic Law Article 44-B, in effect since June 29, 2017, lets DMV-licensed TNCs operate across New York State, except in New York City (NY DMV). The Department of Financial Services FAQ explains the details:
- Where it applies: trips that start in New York State outside New York City, even if they end in the city or out of state. Trips that start in the city follow city rules, including the Taxi and Limousine Commission's.
- Phases: a vehicle counts as a TNC vehicle while the driver is logged on or on a prearranged trip, which runs from acceptance until the last passenger leaves.
- Insurance: while logged on, at least 75/150/25 coverage; during a prearranged trip, at least $1,250,000.
See which rideshare miles count.
Robotaxis and autonomous vehicles in New York
New York allows autonomous vehicle demonstrations and tests under a DMV permit. The DMV requires a $5 million insurance policy and a person with a valid driver license in the driver's seat, ready to take control. It says the law permitting these tests is set to expire on April 1, 2028.
Two proposals would go further, and both are pending as of October 16, 2026:
- NYC Council Int 0094-2026, introduced January 29, 2026 and in the Committee on Transportation and Infrastructure. It would have the TLC create a license for autonomous taxis, issued to medallion owners, with reporting of each trip's pickup, drop-off, mileage and fare.
- A related bill has been introduced in the State Assembly (A00793); check the Assembly site for its current text and status.
More on the NYC side in robotaxi permits and taxi medallions.
What to keep in your New York records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- If you claimed federal bonus depreciation: the vehicle's cost and placed-in-service date for Form IT-398.
- If you're a W-2 employee: unreimbursed business miles kept apart from commuting, with any employer reimbursement, for the IT-196 worksheet.
- For rideshare: note whether each trip started inside or outside New York City, since different rules apply.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
A New York return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- NYS Tax Department, 2025 Form IT-196 instructions
- NYS Tax Department, Form IT-225 instructions
- NY DMV, Information for TNC passengers
- NY DFS, Ride sharing (TNC) FAQ
- NY DMV, AV demonstration/testing permit
- NYC Council, Int 0094-2026
- NYS Assembly, A00793
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Can New York employees deduct unreimbursed mileage?
If you itemize on your New York return, Form IT-196, line 21 allows part of your unreimbursed employee business expenses, including vehicle expenses, with commuting excluded (2025 IT-196 instructions). Ask your preparer.
Does New York allow federal bonus depreciation on a vehicle?
Generally no. New York doesn't follow IRC Section 168(k) for property placed in service on or after June 1, 2003, outside resurgence zone and Liberty Zone property (IT-225 instructions). Use Form IT-398.
Does the state rideshare law apply in New York City?
No. Article 44-B doesn't apply to trips that start in New York City; those follow city rules, including the TLC's (NY DMV; DFS FAQ).
Can driverless cars carry passengers in New York?
Under the DMV's current testing program, a licensed driver must sit in the driver's seat. Proposals to license autonomous taxis are pending (NYC Int 0094-2026). Check current rules with an attorney. NYC Int 0094-2026 would create TLC licensing for autonomous taxis; it is pending.
What insurance does a New York TNC driver need during a trip?
At least $1,250,000 during a prearranged trip, and 75/150/25 while logged on, according to the DFS FAQ.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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