The IRS issued guidance on Friday that indicated the new “no tax on tips” law enacted by Republicans does not include tips received for prostitution or the creation of pornography.
The IRS published implementation materials for the law, a provision within the One Big Beautiful Bill Act that Republicans passed over the summer and that includes several tax cuts and tax cut extensions. There were questions whether tip revenue received by OnlyFans creators and other online pornographic entertainers would be tax-free, but now the IRS has officially excluded that possibility.
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“In addition, the proposed regulations provide that amounts received for prostitution services and pornographic activity are not included in the definition of ‘qualified tips,’” the IRS guidance reads.
Still, online creators of non-pornographic content, such as streamers and podcasters, will be allowed to receive the no tax on tips benefit.
The IRS included a list of qualified professions that will be able to deduct tipped wages, including bartenders, waiters, non-radio DJs, maids, plumbers, nannies, tattoo artists, golf caddies, and dozens more.
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OnlyFans, a platform where people can create and sell pornographic material, has become increasingly popular in recent years. Some analysts speculated that tips received through that and similar platforms might fall under the online creators category for the policy.
The One Big Beautiful Bill Act included a wide range of tax provisions, and now the IRS is working on implementation. Recently, the White House and congressional Republicans have worked to rebrand the legislation as the working families tax cut plan.
That legislation extended tax cuts that were implemented under the 2017 Tax Cuts and Jobs Act but were set to sunset at the end of this year.
One major provision was a push from Republicans in high-tax states to increase the $10,000 cap on state and local tax deductions that was first implemented in the 2017 law. They were able to quadruple the cap to $40,000, although that is set to sunset in five years.
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The bill also permanently allowed companies to immediately deduct domestic research and development costs. It also permanently allowed full expensing for new capital investment, such as factory machinery, and restores interest deductibility to help finance investments.
The bill also fulfills President Donald Trump’s campaign promises of no taxes on overtime pay and sets a $10,000 limit on deductions for auto loan interest paid, among other campaign priorities.