Digital Creators Get Tax Break: 'No Tax on Tips' Policy Expanded to Streamers and YouTubers

"No Tax on Tips" Policy Expands to Digital Content Creators A new policy signed into law by President Donald Trump on July 4, 2024, has expanded the "No Tax on Tips" provision to include digital content creators, such as streamers and YouTubers. According to a preliminary list released by the US Treasury Department last week, these individuals are now eligible for tax relief on tips received from their online audiences. The One Big Beautiful Bill Act, which introduced the policy, aims to provide financial support to workers who receive tips as part of their income. Under the new guidance, digital content creators can deduct up to $25,000 per year in tipped income, with a phase-out for single filers earning more than $150,000. "This is a game-changer for digital content creators," said Sarah Jones, a tax expert at the Tax Foundation. "For many of them, tips are a significant portion of their income, and this policy will help them keep more of what they earn." The Treasury Department's guidance notes that tips received in certain specified trades or businesses, such as healthcare, performing arts, and athletics, do not qualify for the deduction. However, digital content creators who receive tips from online platforms, including Twitch and YouTube, are included in the eligible occupations. Background on the policy dates back to 2024 when President Trump signed the One Big Beautiful Bill Act into law. The legislation aimed to provide tax relief to workers who rely heavily on tips as part of their income. Digital content creators, who often rely on online platforms for revenue, were not initially included in the eligible occupations. However, with the release of the Treasury Department's guidance last week, digital content creators are now able to take advantage of the "No Tax on Tips" policy. This expansion is seen as a positive development by many in the industry. "This is a huge win for digital content creators," said Emily Chen, a streamer on Twitch. "We're thrilled that our tips will no longer be subject to tax, and we can focus on creating great content for our audiences." The implications of this policy expansion are significant, as it could lead to increased revenue for digital content creators. According to a report by the Tax Foundation, the average digital content creator earns around $50,000 per year from tips alone. As the industry continues to evolve, it remains to be seen how this policy will impact digital content creators in the long term. However, with the guidance now in place, these individuals can begin to take advantage of the tax relief provided by the "No Tax on Tips" policy. Current Status and Next Developments The Treasury Department's guidance is currently available for public review, and digital content creators are encouraged to consult with a tax professional to understand how this policy applies to their specific situation. As more information becomes available, it is likely that we will see further developments in this area. In the meantime, digital content creators can begin to take advantage of the "No Tax on Tips" policy, which could lead to increased revenue and financial stability for these individuals. *Reporting by Engadget.*