In a surprising turn for digital content creators, President Donald Trump’s “No Tax on Tips” initiative, signed into law in July 2025, is set to bring significant tax relief to podcasters, influencers, streamers, and online video creators.
This policy eliminates federal income tax on tips for workers in occupations that “customarily and regularly” receive them, and it’s now clear that digital creators are included. From 2025 to 2028, this temporary measure could be a game-changer for small to mid-level creators who rely heavily on tips from platforms like Twitch, YouTube, TikTok, and OnlyFans.
What Qualifies as “Tips” for Creators?
Under the new policy, creators can deduct up to $25,000 in tip income annually from their federal income taxes, provided their total income doesn’t exceed $150,000 ($300,000 for couples). The Treasury Department defines “tips” as voluntary payments where the payer determines the amount, which aligns with features like Twitch’s “bits,” YouTube’s “Super Chats,” TikTok’s “gifts,” and OnlyFans’ “tip menus.”
These are common ways fans support creators directly, often making up a significant portion of income for smaller streamers and influencers. However, it remains unclear whether recurring payments like subscriptions or memberships will qualify as tips. The Internal Revenue Service is expected to clarify this in forthcoming guidelines.
Who Benefits Most?
The policy is poised to benefit small and mid-level creators the most, particularly those whose income heavily relies on direct fan contributions. For example, a Twitch streamer earning $80,000 annually, with $20,000 coming from bits or donations, could deduct the full $20,000 from their taxable income, significantly lowering their tax burden. However, the deduction phases out for individuals earning over $150,000, meaning mega-influencers or top-tier Twitch stars pulling in millions won’t see much impact. For these high earners, the $25,000 cap is a drop in the bucket compared to their revenue from brand deals or other sources.
The Catch: SSTB Exclusions and the “Gray Zone”
Not all creators are guaranteed to benefit. The law excludes self-employed individuals and employees in Specified Service Trade or Business categories, which could include creators specializing in performing arts. This puts creators in entertainment-focused niches — like edutainment, gaming streamers, or those producing artistic videos—in a potential gray zone. The IRS will determine whether these creators fall under this category, which could disqualify them from the deduction. Until the IRS releases updated guidelines, creators in these fields will need to tread carefully and consult tax professionals to understand their eligibility.
Also read:
- Trump-Linked Crypto Project World Liberty Financial Blacklists Justin Sun’s Wallet After $9M Token Transfer
- Factory Workers, Brace Yourselves: 20-Year-Old OnlyFans Star Sophie Rain Rakes in $82 Million
- X Kicks Off Its First Original: A Bold Sports Show Revival
A Win for the Creator Economy, But With Caveats
The inclusion of digital creators in the “No Tax on Tips” policy marks a rare acknowledgment of the creator economy in federal tax law. The Treasury’s preliminary list of 68 eligible occupations spans traditional tipped roles like bartenders to modern ones like podcasters and influencers, reflecting the evolving nature of work.
For creators scraping by on platforms where tips are a lifeline, this deduction could provide meaningful financial relief. However, the temporary nature of the policy (expiring in 2028) and the uncertainty around subscriptions and certain classifications mean creators will need to stay vigilant. Larger creators will face the added burden of navigating complex tax forms to claim the deduction, even if the financial impact is minimal for them.
As the IRS prepares to release detailed guidelines, creators should keep an eye on updates and consult tax professionals to maximize the benefits of this policy. For now, it’s a rare win for the creator community — one that recognizes the hustle of those building careers in the digital age.
