Twitch Streamer Taxes in South Dakota - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Essentials for a Twitch Streamer in South Dakota

From the Black Hills to the prairies, building a community on Twitch in South Dakota offers unique opportunities, but also brings specific tax responsibilities. Revenue earned through streaming, subscriptions, donations, and sponsorships is generally considered self-employment income and is subject to both federal and, while limited, state considerations.

The IRS requires all self-employed individuals, including Twitch streamers, to report their income and expenses on Schedule C (Profit or Loss From Business) with Form 1040. Crucially, if net earnings (income minus expenses) exceed $400, self-employment tax applies. This covers both Social Security and Medicare contributions, and currently stands at a combined rate of 15.3%.

How South Dakota Handles Gig Worker Taxes

South Dakota stands out as one of the few states with no state income tax. This means streamers won’t file a state income tax return based on their streaming income. However, this does not exempt them from federal tax obligations. The lack of state income tax can be a significant benefit, allowing streamers to retain a larger portion of their earnings. However, it also means that all tax burden falls on the federal level, making accurate record-keeping and maximizing deductions even more important. South Dakota does collect sales tax, and while generally not directly applicable to streaming services themselves, it could apply to merchandise sales if a streamer sells physical goods. Streamers operating as a business entity (like an LLC) will also need to consider any applicable business license requirements at the local level, often handled by the county. Given South Dakota’s strong agricultural base, many resources are geared towards farm and ranch operations, but the general principles of self-employment tax apply equally to digital entrepreneurs. For more information on business regulations in South Dakota, please visit the South Dakota Department of Revenue: https://dor.sd.gov/

Key Tax Deductions for Home-Based Twitch Streamers

• Home Office Deduction: To qualify for the home office deduction, the space must be used exclusively and regularly for your streaming business. “Exclusive use” means that portion of your home is used solely for streaming – it can’t double as a guest room or family room. “Regular use” means you use it 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), graphic design software (like Adobe Creative Cloud), and any hosting fees associated with your stream.
• Internet & Phone Bill: You can deduct the business-use percentage of your internet and phone bills. If you use your internet and phone for both personal and business purposes, you need to determine the percentage of time it’s used for streaming. For example, if you estimate 75% of your internet usage is for streaming, you can deduct 75% of the bill.

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 (e.g., sponsorships), or to purchase equipment, you can deduct those business-related miles using the standard mileage rate set by the IRS.

The 15.3% Self-Employment Tax Explained

The 15.3% self-employment tax is comprised of two parts: 12.4% for Social Security and 2.9% for Medicare. This is essentially the equivalent of the employer and employee portions of these taxes when you are traditionally employed. You are responsible for paying both portions as a self-employed individual. However, you can deduct one-half of your self-employment tax from your gross income when calculating your adjusted gross income (AGI).