Treasury Department Extends Tax-Free Tip Deduction to Digital Content Creators, Capping at $25,000

Washington D.C. – The U.S. Treasury Department has officially included digital content creators, such as streamers, influencers, and podcasters, among the dozens of occupations eligible for a new "no tax on tips" deduction. This measure, part of President Donald Trump's "Big Beautiful Bill" passed in July, allows qualifying workers to deduct up to $25,000 in tip income from their federal taxes starting next year. The policy aims to fulfill a key campaign promise and is set to impact a significant segment of the online creator economy.

The new tax deduction applies to income received from tips, defined broadly for digital creators to include mechanisms like Twitch "bits," TikTok "gifts," YouTube "Super Chats," and OnlyFans "tip menus." While many digital content creators primarily earn through advertising and brand deals, a substantial portion of their income, particularly for mid-tier creators, comes from direct audience support in the form of tips. The deduction is capped at $25,000 and phases out for individuals earning over $150,000 annually or married couples making more than $300,000.

A Treasury spokesperson confirmed to Business Insider that the draft list of eligible occupations explicitly names streamers, online video creators, social media influencers, and podcasters. These individuals are described as those who "produce and publish on digital platforms original entertainment or personality-driven content." The inclusion of these modern professions alongside traditional tipped workers like food service staff, dancers, and hospitality employees marks a significant recognition of the evolving workforce.

The "no tax on tips" policy is temporary, slated to expire after 2028, though Congress retains the option to extend or make it permanent. The Treasury Department was mandated to publish a final list of eligible occupations within 90 days of the bill's passage. Congressional budget analysts project this provision could increase the federal deficit by an estimated $40 billion through 2028, reflecting the broad scope of its application across various industries.