Katherine Green, a dominatrix who creates online adult videos, wasn't expecting a windfall from President Donald Trump's signature push to make tips tax-free.
The Houston-based OnlyFans Ltd. creator, who goes by the title Mistress professionally, is not a waitress, a rideshare driver or a golf caddy — professions typically associated with tipping. But new Treasury Department guidelines on Trump's tax law include digital content creators like Green on the break.
"It's really exciting news. It was a surprise," said Green, who now hopes to get "a decent-sized tax break."
The inclusion of online content creators, such as podcasters and social media influencers, promises to sweeten the allure of internet fame and marks the rising prominence of a new class of performers. It also helps the Trump administration cultivate a group that both political parties want to leverage to reach new audiences and energize voters.
More than a quarter of large U.S.-based influencers — those with at least 100,000 followers — reported earning tips, according to a 2024 study by the Creative Class Group. The new tax law could restructure compensation in an emerging industry to draw even more heavily on gratuities.
"I see this as a way of appearing friendly to a group of people the administration probably would like to have a relationship with," said Jeffrey Harden, a political science professor at the University of Notre Dame.
Trump and his Democratic rival Kamala Harris embraced digital content creators during the 2024 presidential election. Both presidential candidates went on popular podcasts to broadcast their message, and each party's convention granted media credentials to online influencers.
Since the election, the Trump administration has paraded digital content creators through the White House briefing room with a dedicated "new media" seat. Democrats are also spending big to find online voices, who can appeal to voters.
'Huge win'
Daniel Abas, president and founder of the Creators Guild of America, a nonprofit representing digital content creators, said the tax break will "have a very strong economic impact for creators, particularly earlier in their careers."
The vast majority of creators make less than the $150,000 income cap at which the tax break begins to phase out, according to the Creative Class Group study. Creators making up to $400,000 a year could claim some portion of the deduction.
Even before the new tax law, tipping was taking on a more important role in online performers' compensation. Digital content creators reported a 40% increase in tips in 2024 compared to the previous year, according to a report by eMarketer Inc.
Adult content creators operating online through platforms such as OnlyFans could be among the biggest beneficiaries since they are particularly reliant on tips, Abas said.
Green, who is active on several platforms in addition to OnlyFans, said tips are a big part of her income. She is already working with her accountant, Katherine Studley, to navigate the law, which Trump signed in July.
"I'm a smart enough businesswoman to realize that taxes and finances are not my strong suit," Green said in a phone interview while traveling in Greece.
Studley, who specializes in tax preparation for OnlyFans creators, called the inclusion of digital creators a "huge win" for the adult segment of the market — and a surprising move coming out of a Republican administration aligned with social conservatives. She predicted Green is one of many clients who will benefit.
The administration's guidelines don't specifically identify adult digital content creators, and it's possible that future formalized guidance from Treasury and the IRS could exclude them.
But tax policy analysts and lawyers said nothing in the guidance so far suggests adult performers would be excluded. Studley cited the inclusion of dancers on the list of job categories eligible for the tip income deduction.
"'Customarily tipped,' which would mean a stripper not a Rockette," Studley said.
Swelling cost
Extending the tipped income tax break to digital content creators could raise regulatory questions and potentially swell the cost of the four-year tax cut beyond the $32 billion estimated when Congress passed the law, policy and legal experts said.
The tax break allows qualified taxpayers to deduct up to $25,000 in tips a year from their tax bills.
Defining a tip in the digital creative space could be complicated, said Alex Muresianu, a senior policy analyst at the Tax Foundation.
Currently, a tip is a voluntary and optional payment a customer makes in addition to the cost of the goods or services provided. If creators provide any additional content or benefits to subscribers, that subscription cost would not fit the current definition of a tip. Some influencers may be tempted to categorize payments as tips that in reality don't fit the bill or restructure their pay to take advantage of the tax break, Muresianu said.
"I think that will be a thorny issue with implementation," he said. "The tax structure could reshape compensation substantially in those areas that could lead to reshaping of behavior and also a higher fiscal cost."
Michael Chittenden, an attorney at Covington & Burling LLP, said the tax break could reshape how some influencers structure their compensation, but the effect would likely be tempered by the temporary nature of the tax cut, which expires after 2028, and the income cap.
"You're not going to have, in general, people with access to the most high-dollar, sophisticated tax planning available to them to do this. But I think ideas will percolate in the creator community," he said. "People respond to tax incentives, as a general rule."
