Feed: Slashdot
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Title: 'No Tax On Tips' Includes Digital Creators, Too

Link: https://news.slashdot.org/story/25/09/11/2058...

"President Trump's One Big Beautiful Bill Act may have quietly changed the
economics of the creator economy," reports the Hollywood Reporter. The
Treasury Department has ruled this past week that digital creators, including
podcasters, influencers, and streamers, qualify for the U.S. "no tax on tips"
policy, allowing them to deduct tipped income up to $25,000. From the report:
The change could cause digital creators to rethink how they seek income.
Platforms like TikTok, YouTube, Twitch and Snapchat all offer a variety of
ways for creators to generate income, be it a share of advertising revenue or
creator funding programs, or options to launch subscription tiers for their
channels or profiles. But they also give creators the option to turn on tips
or gifts. If revenue from user tips or gifts is eligible, while recurring
subscription revenue is not, it could shift how streamers, podcasters or
influencers ask their followers to support them. To be sure, there are
limitations: The tax deduction is capped at $25,000 per year, and it begins
to phase out at $150,000 in income for single filers and $300,000 for married
joint filers. The act also provides that tips do not qualify for the
deduction if they are received "in the course of certain specified trades or
businesses -- including the fields of health, performing arts, and
athletics," Treasury says, further limiting the deduction opportunity for
some in entertainment-adjacent lines of work. But by making influencers,
Twitch streamers and podcasters eligible, the administration has nonetheless
changed the incentive structure for digital creators, and the ramifications
could be felt across the creator economy in the name of tax efficiency (Don't
be surprised if users are asked to like, subscribe, and tip). Platforms may
also develop more ways to more prominently feature tips and gifts, pushing
creators to add more opportunities for that income. But the inclusion of
digital creators is also a recognition of how the power dynamics have shifted
in media.

Read more of this story at Slashdot.

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