Freelance Businesses: Check Your NYC Congestion Pricing Tax Credit Eligibility

New York City's recent implementation of its congestion pricing plan has officially gone into effect with the overall goals of reducing traffic and funding public transit improvements.

The New York City Congestion Pricing Plan charges drivers a toll to enter Manhattan south of 60th Street during peak hours. While the goal is to alleviate congestion and promote cleaner air, the impact on freelance business owners doing business in the city could be significant.

How the New York City Congestion Pricing Tax Credit Works

Drivers entering the congestion zone between 5 a.m. and 9 p.m. on weekdays, and 

9 a.m. to 9 p.m. on weekends, will be charged a $9 toll if they use an E-ZPass. The toll drops to $2.25 during off-peak hours. Those without an E-ZPass will face an additional 50% fee. For freelancers who frequently travel into New York City for meetings, client visits, or other business activities, these costs can quickly add up.

Manhattan Congestion Toll Pricing Details

Here's a breakdown of the current costs (Note: Fees will increase by 33% in 2028 and another 25% in 2031):

• Regular passenger vehicles: $9 (peak), $2.25 (off-peak). One daily charge, regardless of multiple entries and exits.
• Small trucks and charter buses: $14.40 (peak), $3.60 (off-peak).
• Tractor trailers: $21.60 (peak), $5.40 (off-peak). Unlike cars, commercial trucks are charged each time they enter the CBD.
• Intercity commuter buses and yellow school buses: Exempt from the toll.
• Tour buses: $21.60 (peak), $5.40 (off-peak).
• Motorcycles: $4.50 (peak), $1.05 (off-peak).
• Yellow or green cab passengers: 75 cents per trip.

To help offset these costs residents of the Congestion Relief Zone (CRZ) whose New York State adjusted gross income is under $60,000 may qualify for a tax credit in the amount of tolls paid. 

In addition, low-income drivers may also qualify for LIDP, vehicle owners must have reported a federal adjusted gross income for the previous calendar year of no more than $50,000, or be enrolled in a qualifying government assistance program. Drivers enrolled in the Low-Income Discount Plan (LIDP) receive a 50% discount on the Congestion Relief Zone peak toll.

The discount is available for passenger vehicles in the peak period. It begins after the first 10 trips in a calendar month and applies to all peak period trips after that. To qualify, applicants must provide: 

• IRS Form 1040 or Tax Return Transcript and corresponding W-2s from the most recent tax year, or 
• Proof of enrollment in Supplemental Nutrition Assistance Program (SNAP), Special Nutrition Assistance Program for Women, Infants, and Children (WIC), or Temporary Aid to Needy Families Program (TANF) 

Your home address must match on all documents and you must have a valid E-ZPass NY account. Vehicle owners without an E-ZPass NY account must sign up for one before applying for LIDP.

For New York City Freelance Businesses, Tracking Toll Expenses is Key 

As the congestion pricing plan continues to roll out, it is important for freelancers to monitor their toll usage and keep records of any charges incurred as they travel into Manhattan. When using your vehicle for work you are eligible to deduct this expense as part of your business expenses just like any other ordinary business expense.

If you are a resident of the CRZ in New York making less than $60,000 a year, be sure to track your toll usage and apply for a tax credit (if you are eligible) on your 2025 tax return, too.