Qualified tips

A tip qualifies only if the payer chooses to give it and sets the amount, with nothing negotiated and no consequence for not paying. Card, check and payment app tips count as cash, while non-cash items and digital assets do not. Digital content creators are on Treasury’s list as occupation code 209, which names streamers, podcasters and social media influencers among its example titles.

Treasury’s final regulations turn on whether a payment was required. A fee to see content is pay for services, while a voluntary payment during a free live stream can be a qualified tip.

To claim the deduction, a married couple must file jointly, and your Social Security number must be on the return.

For the self-employed, the deduction cannot create or increase a business loss. It lowers your income tax only, so your self-employment tax stays the same.

You claim the deduction on Schedule 1-A, whether or not you itemize. From 2026, it generally needs the tips reported separately on your 1099 or W-2. For 2025, the tips had to be in a 1099 or W-2 total, and a tip log could show which part was tips. For 2025 and 2026, an IRS notice treats listed creators as outside a specified service trade or business (SSTB). Tips earned in an SSTB would otherwise not qualify.