The United States government has introduced a new law as part of President Trump’s Big Beautiful Bill, which was passed in July. The “no tax on tips” law allows workers to earn tips without having to declare them on taxes. The U.S. Treasury has released a list of eligible professions, which includes not only traditional service industry jobs like bartenders, wait staff, and food servers, but also content creators.
The list defines digital content creators as individuals who produce and publish original entertainment or personality-driven content on digital platforms, such as live streams, short-form videos, or podcasts. This category includes comedians, singers, musicians, and DJs who often perform on streaming platforms like Twitch. The law also applies to other performers, including dancers, ushers, lobby attendants, bellhops, and entertainers.
However, there are some limitations to the law. The tax deduction is capped at $25,000 per year, which may not benefit popular streamers who earn more than this amount. Additionally, tips cannot be written off if they are received in certain industries, including health, performing arts, and athletics.
The new law is likely to impact how content creators and streamers earn revenue. Tipping, often referred to as “donations,” is a significant source of income for many content creators, particularly those on Twitch and other streaming platforms. A study found that 19 percent of large influencers received tips from their audience across all platforms, and this number is likely higher on streaming platforms.
As a result of the law, content creators may focus more on receiving tips to maximize their earnings. This could lead to changes in the way the content creator industry seeks revenue, potentially shifting away from traditional methods like advertising. The new law may also lead to increased requests from content creators for viewers to “like, subscribe, and tip” in order to support their work. Overall, the “no tax on tips” law has significant implications for the content creator industry and may lead to changes in the way creators earn and report their income.
