President Donald Trump’s recent tax legislation, which exempts tip income from federal taxes, is providing an unexpected financial boon to digital content creators. This provision, part of the broader “Big Beautiful Bill” that was passed in July, allows qualifying individuals to deduct up to $25,000 in tip income from their federal taxes through the year 2028. Initially aimed at restaurant servers and hospitality workers, this measure now extends its benefits to a wide range of online personalities who depend on audience contributions.
The initiative acknowledges the evolving nature of work in the digital age, where content creators receive direct tips from their followers, similar to traditional tipping in restaurants. The U.S. Treasury Department has articulated a broad range of qualifying occupations, which now includes podcasters, social media influencers, streamers, and other digital creators, categorizing them under “Entertainment & Events.”
A study conducted in 2024 by the Creative Class Group highlights that over a quarter of large U.S.-based influencers—those boasting 100,000 followers or more—have reported receiving tips. The report suggests that this legislative change could significantly alter the compensation structure for content creators, potentially making gratuities a central part of income for many in the industry.
The tax provision specifically targets individuals making below defined income thresholds: single filers up to approximately $150,000–$160,000, and married filers up to $300,000, with a phase-out for higher earners. Advocates believe that the change could transform the financial landscape for many creators still in the early stages of audience building. Daniel Abas, president of the nonprofit Creators Guild of America, noted that most creators typically fall below these income thresholds, making this relief particularly impactful for emerging voices in the space.
Adult entertainment creators, notably those using platforms like OnlyFans, may receive the most significant advantages from this law, as their income is heavily dependent on viewer tips. Tax preparer Katherine Studley, who works with adult performers, described the exemption as “a huge win” for her clients, highlighting the unexpected nature of this legislative move from a Republican administration, which often promotes social conservatism.
However, the financial implications of this policy are substantial. The nonpartisan Congressional Budget Office projects an increase in the deficit by $40 billion through 2028, while the Joint Committee on Taxation estimates that the deduction will cost approximately $32 billion over the next decade.
The decision to include digital creators reflects their rising influence and perceived political capital. Both Trump and Democratic challenger Kamala Harris reached out to online influencers during the 2024 election, engaging with them through mainstream podcasts and platforms like TikTok. Upon Trump’s inauguration, the White House even opened press briefings to “new media voices,” leading to more than 7,400 influencer applications for press credentials within a single day.
Despite these advantages, there are complexities surrounding the definition of “tips” in the digital realm. Financial expert Alex Muresianu from the Tax Foundation has pointed out that differentiating between tips and other forms of transaction can be challenging. For example, offerings on platforms like YouTube known as “Super Chats,” Twitch’s “bits,” and TikTok’s “Gifts” all qualify as tips under the new law. Conversely, for creators on OnlyFans, who provide customized content and direct interactions through “tip menus,” the classification can be less straightforward.
As content creators navigate these new regulations, some are already revisiting their pay structures to take full advantage of the tax provision. As they seek guidance on compliance, the industry may witness a significant shift in monetization models, impacting how creators structure their income streams going forward.
