Twitch Streamer Taxes in Kentucky - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Twitch Streamer in Kentucky

From the rolling hills of the Bluegrass State to the digital arena of Twitch, Kentucky streamers are building communities and earning income – and that income is subject to tax. As a self-employed individual operating a Twitch channel, understanding your tax obligations is crucial for staying compliant with both federal and Kentucky state regulations.

The IRS considers income earned through Twitch streaming as self-employment income. This means it must be reported on Schedule C (Profit or Loss from Business) with your Form 1040. Furthermore, any net earnings exceeding $400 are subject to self-employment tax, covering both Social Security and Medicare contributions.

How Kentucky Handles Gig Worker Taxes

As a resident of Kentucky, a state income tax return is required even if no Kentucky tax is ultimately due. Kentucky operates under a flat income tax rate, currently at 4.0% for the 2025 tax year. This applies to all levels of taxable income. Twitch streaming income is considered taxable income in Kentucky, and you'll need to report it on Form 740, Kentucky Income Tax Return for Individuals. Specifically, self-employed individuals will utilize Schedule K, Kentucky Income, to calculate their net profit or loss from their streaming business. Kentucky also allows for certain deductions similar to the federal level, which can reduce your overall tax liability. It's important to note that Kentucky does not conform to all federal deductions, so careful review of state-specific guidelines is essential. Kentucky also requires the payment of estimated taxes quarterly if your expected tax liability exceeds $500. Failure to do so can result in penalties. Resources for understanding Kentucky tax laws and filing requirements can be found on the Kentucky Department of Revenue website: https://revenue.ky.gov/. Keep meticulous records of all income and expenses to ensure accurate reporting and maximize potential deductions.

Key Tax Deductions for Home-Based Twitch Streamers

• Home Office Deduction: To claim the home office deduction, the space must be used exclusively and regularly for your Twitch streaming business. “Exclusive use” means that portion of your home is used solely for streaming – it cannot double as a guest room or family room. “Regular use” means you use the space consistently for your streaming activities. You can calculate the deduction using the simplified method ($5 per square foot, up to 300 square feet) or the actual expense method (calculating a percentage of your mortgage/rent, utilities, etc., based on the square footage used for business).
• Hardware & Software: The cost of essential hardware and software used for streaming is generally deductible. This includes your computer, webcam, microphone, lighting, streaming software subscriptions (like OBS Studio Pro), and creative software subscriptions (like Adobe Creative Cloud) directly related to content creation.
• Internet & Phone Bill: You can deduct the business-use percentage of your internet and phone bills. For example, if 80% of your internet usage is for streaming-related activities, you can deduct 80% of your internet bill. Maintaining a log of business vs. personal use is highly recommended.

Note on Mileage: As a predominantly home-based worker, mileage deductions are less common for Twitch streamers. However, if you occasionally travel for streaming-related events, client meetings, or to purchase equipment, you can deduct those business miles using the standard mileage rate (set annually by the IRS).

The 15.3% Self-Employment Tax Explained

The 15.3% self-employment tax is comprised of two components: 12.4% for Social Security and 2.9% for Medicare. This tax is essentially the equivalent of the Social Security and Medicare taxes withheld from an employee’s paycheck. As a self-employed individual, you are responsible for paying both the employer and employee portions of these taxes.