NEMT Business Taxes in 2027: Mileage, Depreciation, and Quarterly Payments

A NEMT company pays the same federal taxes as any small business. What sets it apart is the vans: they drive tens of thousands of miles, a ramp minivan’s base price on Florida’s state contract is $69,476, and the tax rules for vehicles that carry people for pay differ from the rules for an ordinary car. The figures below are for the 2026 tax year, the return you file in 2027. Your state adds its own income, payroll, and unemployment taxes, so bring this page to your tax preparer rather than filing from it alone.

Which taxes a NEMT business pays

Tax	Who pays it	Form	When
Income tax on profit	You, for a sole proprietorship, a partnership, or an S corporation. The company itself, for a C corporation.	Schedule C with Form 1040, a K-1 from Form 1065 or 1120-S, or Form 1120	The yearly return, plus estimated payments during the year
Self-employment tax	Sole owners and partners, on net earnings of $400 or more	Schedule SE	With your return and estimated payments
Social Security and Medicare on wages	You match what you withhold from each employee	Form 941, quarterly	Deposits monthly or semiweekly
Federal unemployment tax	Employers	Form 940, yearly	Deposit when over $500
Federal income tax withholding	Withheld from employees’ pay	Form 941 and W-2	With your payroll deposits

Self-employment tax is 15.3 percent: 12.4 percent for Social Security and 2.9 percent for Medicare. It applies to 92.35 percent of your net profit (IRS Publication 334), and for 2026 the Social Security part stops once your combined wages and self-employment earnings reach $184,500. On $60,000 of profit, that is $60,000 × 92.35% × 15.3%, or $8,477.73, before any income tax. You deduct half of it, $4,238.87 here, in figuring your adjusted gross income. An additional 0.9 percent Medicare tax applies above $200,000 for a single filer or $250,000 on a joint return.

How your company is set up decides which rows apply to you. See LLC for NEMT for how each structure is taxed.

Vehicle deductions: the mileage rate or actual costs

You can deduct a business vehicle two ways. The standard mileage rate is a set amount per business mile. Actual costs means depreciation or lease payments plus fuel, insurance, repairs, tires, oil, registration, and licenses.

Period	Business rate per mile	Share treated as depreciation
2025	70 cents	33 cents
January 1 to June 30, 2026	72.5 cents	35 cents
July 1 to December 31, 2026	76 cents	35 cents

The IRS raised the rate on July 1, 2026 because of higher fuel prices (Announcement 2026-11). Miles driven before that date use 72.5 cents and miles from that date on use 76 cents, so split your 2026 log at July 1. The depreciation share lowers your basis in the van for every mile you claim, which matters when you sell it.

The rules that decide which method you can use

IRS Publication 463 (2025) sets them out:

• Five or more vehicles. If you own or lease five or more vehicles used for business at the same time, you cannot use the mileage rate for any of them. Vehicles you alternate, using them at different times, do not count as used at the same time.
• First-year choice. For a vehicle you own, choose the mileage rate in the first year it is used in your business. You can switch to actual costs later, but then you must use straight-line depreciation.
• No going back after fast depreciation. Once you claim section 179, special depreciation, or MACRS or any other depreciation faster than straight-line on a vehicle, you can never use the mileage rate for it.
• Leased vehicles. If you choose the mileage rate for a leased van, you must use it for the whole lease.
• Vehicles for hire. A vehicle used for hire, such as a taxi, can use the mileage rate unless another rule above blocks it.
• Extras. With the mileage rate, you still deduct business parking fees and tolls. A self-employed owner also deducts the business share of the loan interest.

Worked example: one owner, one van, one year

An owner-operator buys a ramp minivan in 2026 and drives 40,000 business miles, 20,000 before July 1 and 20,000 after. The price is the $69,476 base price on Florida DOT’s state minivan contract (order form effective February 20, 2025). The operating costs are example numbers.

First-year deduction	Mileage rate	Actual costs, regular depreciation	Actual costs, 100% special depreciation
Miles or operating costs	20,000 × $0.725 + 20,000 × $0.76 = $29,700	Fuel $9,400, insurance $10,800, repairs and tires $6,000, registration $400 = $26,600	$26,600
Depreciation	Built into the rate: 40,000 × $0.35 = $14,000 off your basis	20% of $69,476 = $13,895	$69,476
Total for 2026	$29,700 plus tolls, parking, and loan interest	$40,495	$96,076

The middle column assumes you elect out of special depreciation. The mileage rate is the simplest and needs only a mileage log, but it can deduct less when a van is expensive and insurance is high. The 100 percent option moves years of deductions into year one. That helps most in a year with high profit, and it means the van can never switch to the mileage rate. Regular depreciation for 5-year property under the half-year convention starts at 20 percent, as in IRS Publication 946’s own example. The mileage deduction calculator compares the methods with your numbers.

Which miles count

• Business miles: your garage or office to a pickup, every loaded leg, the drive between trips, and the drive back.
• Commuting, not deductible: home to the place you regularly work. Publication 463 bars it even if you take calls on the way.
• The home office exception: if your home office is your principal place of business, trips between it and a pickup can be business miles.

Empty miles to a pickup are business miles for tax purposes even though Medicaid generally does not pay for them. See NEMT cost per trip for what those miles cost you.

How to depreciate a wheelchair van

Vans that carry riders for pay get better treatment than ordinary cars. Here is what IRS Publication 946 (2025) and Revenue Procedure 2025-32 say for 2026:

• No car caps. A vehicle used directly in the business of transporting persons for pay or hire is not a passenger automobile. The yearly depreciation limits for passenger automobiles do not apply to it.
• Still listed property. Vehicles used for hire remain “other property used for transportation.” You must use the van more than 50 percent for business to claim section 179 or special depreciation. If business use later falls to 50 percent or less, part of the deduction is recaptured as income.
• 5-year property. Automobiles, taxis, buses, and trucks are 5-year property under MACRS.
• 100 percent special depreciation. The One Big Beautiful Bill Act restored the 100 percent special allowance for qualified property acquired and placed in service after January 19, 2025. New vehicles and certain used ones qualify. It applies unless you elect out, and electing out covers all 5-year property you placed in service that year.
• Section 179. For tax years beginning in 2026, you can expense up to $2,560,000 of section 179 property, reduced dollar for dollar once purchases pass $4,090,000. The deduction cannot exceed your taxable income from the active conduct of your businesses.
• The heavy passenger van cap. Section 179 is limited to $32,000 in 2026 for a passenger vehicle rated over 6,000 and up to 14,000 pounds gross vehicle weight, unless it seats more than nine people behind the driver. The ADA ramp minivan on Florida’s contract is rated at 6,055 pounds, so the cap can reach a minivan. The cap is a section 179 limit.

You make these choices on Form 4562, and vans go in Part V with other listed property. Two costs come later. If you sell a van, the gain up to the depreciation you took is taxed as ordinary income. And a van you wrote off in year one has no depreciation left for the years after, when your profit may be higher.

Leasing works differently: lease payments are an actual cost, and a van on the mileage rate must stay on it for the whole lease. See lease or buy NEMT vehicles and wheelchair van cost.

Records that hold up in an audit

IRS Publication 463 lists what proves a vehicle deduction: the cost of the van and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. Publication 946 adds that the record should be made at or near the time. A log kept weekly counts, and so does a trip sheet or an electronic log.

Your Medicaid trip logs record the loaded legs. They may not show the empty miles between trips, so add three habits:

1. Write down the odometer at the start and end of every shift, for every van.
2. Keep fuel, repair, insurance, and registration receipts by van, so actual costs are easy to total. The vehicle maintenance log helps.
3. Keep the purchase papers for each van: price, date placed in service, and any ramp or lift work added later.

A separate mileage log keeps it all in one place. For how long to keep each record, see the FAQ below, and for monthly books, see NEMT bookkeeping.

Payroll taxes when you hire drivers

From IRS Publication 15 (2026):

• Social Security and Medicare. Withhold 6.2 percent and 1.45 percent from each employee’s wages and pay the same amounts yourself, 7.65 percent each side. The Social Security part stops at $184,500 of wages in 2026. Medicare has no limit.
• Federal unemployment tax. FUTA is 6.0 percent of the first $7,000 of each employee’s wages. With the full 5.4 percent credit for state unemployment tax paid on time, it drops to 0.6 percent, or $42 per employee a year. State unemployment tax comes on top.
• Deposits. In your first calendar year you are a monthly depositor: deposit each month’s taxes by the 15th of the next month. After that, you stay monthly if you reported $50,000 or less in the lookback period, and deposit semiweekly if more. All deposits go by electronic funds transfer.
• Filing. Form 941 is due by the last day of the month after each quarter. Form 940 and each employee’s W-2 are due January 31.
• Trust fund taxes. Withheld income tax and the employee share of Social Security and Medicare belong to the government. If they are not paid over, the trust fund recovery penalty is 100 percent of the unpaid tax, and the IRS can impose it on each person responsible who acted willfully. That can include whoever signs the checks. Never use this money to cover fuel or a late broker payment. See NEMT cash flow.
• Overtime on the W-2. For 2025 through 2028, workers can deduct up to $12,500 of qualified overtime pay, the premium half of time-and-a-half, or $25,000 on a joint return. Employers must report qualified overtime to them. The IRS gave employers transition relief for 2025 reporting only.
• New hires. Every state has a new hire registry, and you must report each new employee to it.
• Records. Keep employment tax records for at least four years.

Drivers who use their own cars. Mileage reimbursements paid under an accountable plan are not wages and are not taxed. The plan must require drivers to account for the miles within a reasonable time and return any excess. The IRS treats accounting within 60 days and returning excess within 120 days as reasonable.

Contract drivers. File Form 1099-NEC for each contractor you pay $2,000 or more in 2026, by February 1, 2027 (January 31 falls on a Sunday). The threshold was $600 before 2026. Under the common-law rules in Publication 15, a worker is generally your employee if you have the right to control what will be done and how, whatever you call the job. Read NEMT drivers: 1099 or W-2 before you decide, and see NEMT driver pay for wage rules.

Quarterly estimated tax payments

Nobody withholds tax from your profit, so you pay it during the year. Sole owners, partners, and S corporation shareholders generally must pay estimated tax if they expect to owe $1,000 or more when they file. Corporations must if they expect to owe $500 or more.

Payment	2026 tax year (Form 1040-ES)	2027 tax year
1	April 15, 2026	April 15, 2027
2	June 15, 2026	June 15, 2027
3	September 15, 2026	September 15, 2027
4	January 15, 2027	January 18, 2028

A payment due on a Saturday, Sunday, or legal holiday is on time the next business day. January 15, 2028 is a Saturday and January 17 is a federal holiday, which moves the last 2027 payment to January 18. If you file your 2026 return by January 31, 2027 and pay everything you owe, you can skip the January 15 payment.

How much to pay. You generally avoid the underpayment penalty if you pay at least 90 percent of this year’s tax or 100 percent of last year’s, whichever is smaller (IRS Publication 505, 2026). If your 2025 adjusted gross income was over $150,000 ($75,000 if married filing separately), the second figure is 110 percent. If your income is steady, divide the yearly estimate from the Form 1040-ES worksheet by four.

When income comes unevenly. Broker and Medicaid payments can bunch up. The annualized income method on Form 2210 lets you make smaller payments in slow quarters and larger ones after big payouts.

How to pay. Use IRS Direct Pay, your IRS online account, or, for a company, the business tax account or EFTPS. Calendar-year C corporations pay on the 15th day of the 4th, 6th, 9th, and 12th months of their tax year.

The QBI deduction

Owners of sole proprietorships, partnerships, and S corporations may deduct up to 20 percent of qualified business income. Income earned through a C corporation does not qualify, and neither does the salary an S corporation pays you.

• The 2026 threshold. If your taxable income before the deduction is $201,750 or less, or $403,500 on a joint return, the limits based on W-2 wages, property, and type of business do not apply. Above that, they phase in over the next $75,000, or $150,000 on a joint return (Revenue Procedure 2025-32).
• Type of business. Health is on the list of service fields that lose the deduction at higher incomes. If your income is above the threshold, ask your preparer how that list applies to a transportation company.
• New for 2026. For tax years beginning after 2025, owners who materially participate in their business and have at least $1,000 of qualified business income from it can claim a minimum deduction of $400.

Your tax calendar through April 2027

Dates below are already moved off weekends where the regular date falls on one.

Date	What is due
November 2, 2026	Form 941 for July to September (October 31 is a Saturday)
December 15, 2026	Last 2026 estimated payment for calendar-year C corporations
January 15, 2027	Last 2026 estimated payment for owners (Form 1040-ES)
February 1, 2027	W-2s to employees and the Social Security Administration, Forms 1099-NEC, Form 941 for October to December, and Form 940 (January 31 is a Sunday)
March 15, 2027	2026 partnership and S corporation returns (Forms 1065 and 1120-S) and owners’ K-1s
April 15, 2027	2026 Form 1040 with Schedule C and Schedule SE, calendar-year Form 1120, and the first 2027 estimated payment. Form 4868 or Form 7004 extends the time to file.

How to set up your NEMT taxes, step by step

1. Choose your structure with a CPA and know which returns you file. See LLC for NEMT.
2. Open a business bank account and run every broker deposit and business expense through it.
3. Decide the method for each van in its first year. Compare the mileage rate with actual costs before you file, because some choices cannot be undone.
4. Keep a log for every van with odometer readings at each shift’s start and end.
5. Set aside tax money from every deposit and pay estimated tax by each due date.
6. Run payroll on schedule. Deposit withheld taxes on time and file Form 941 every quarter.
7. Collect a Form W-9 from any contractor before the first payment, and file 1099-NEC forms by January 31.
8. Close your books every month so your preparer starts from clean numbers. See NEMT bookkeeping.
9. Review in the fall. Before December, look at the year’s profit with your preparer and decide whether to buy or place a van in service before year-end.