Is Patreon Taxable Income?

Patreon is a website that allows people to contribute funds to support the work of artists and creators. When you get money, do you have to pay taxes on Patreon? If so, what are the Patreon taxes for creators? Is Patreon tax deductible? Let’s start from the beginning. Is Patreon taxable?

What Is Patreon Income?

Patreon is deliberately misspelled, likely because was already taken and whoever owned it wanted too much money for it.

A patron, as in patron of the arts, is (or was) a person who supports artists or art causes. The most famous patrons of all time were the Medici family, who supported numerous artists, including Leonardo da Vinci. The idea behind the website is arguably similar.

taxes on patreon

The Patreon website allows people to support “creators” by pledging a certain payment per month. In exchange, the creator may (but is not obligated to) offer various “rewards” for said contributions. The question is are Patreon payments considered taxable income for income tax filing purposes.

Is Patreon Tax Deductible?

Most Patreon Contributions Not Tax Deductible

Let’s start with the easier question. No matter how much you like artists, and no matter how much supporting them feels like a charitable donation, such contributions are typically not tax-deductible contributions in the eyes of the IRS.

IRS Publication 526 deals with charitable contributions and it specifically says,

“You cannot deduct contributions to individuals including… contributions to individuals who are needy or worthy.”

Does Patreon Count as a Charity?

Is Patreon legit as a charity? Just because something seems like a charity, or an organization calls itself a charity, doesn’t mean contributions to it are tax deductible. The gold standard of charitable contributions is a 501(c)(3) organization. These organizations submit forms to the IRS claiming they are a charity and keep those forms up to date each year. In exchange the IRS considers contributions to 501(c)(3)s to be charitable contributions.

If the recipient of the contributions is established as a 501(c)(3) organization with a valid Tax ID number for that organization then contributions may be tax deductible. For Patreon to be fully deductible charity contributions, the person making the contribution cannot receive any benefit in exchange. Thus, even Patreon contributions made to charitable organizations may not be tax deductible if any of the rewards received by the contributor are of value. In that case, the value of any benefits received may not be deducted.

So, for example, if you do manage to find a qualified organization on Patreon and contribute $50 per month, but you get a t-shirt worth $10 each month, you could only deduct $40 per month as a charitable contribution.

Remember, the newest tax law increased the standard tax deduction and made deductions for charitable contributions much less useful as a way to reduce taxes for many taxpayers.

Is Money from Patreon Income Taxable?

To find out are Patreon donations taxable, we turn to the tax code itself.

The overriding section of a tax code says,

“Except as otherwise provided… income means all income from whatever source derived.”

In other words, EVERYTHING is considered income for tax purposes unless it fits under a defined exception, including Patreon earnings. Also, gambling winnings, selling drugs, if you got money for selling your kidney, it doesn’t matter, income from any source, legal or illegal, online, offline, traditional, or new economy, all counts as income. Criminals that can’t be convicted of their crimes are often sent to prison anyway by being convicted of tax evasion since they didn’t report any income from their criminal affairs.

The question is whether or not the earnings from Patreon are taxable income.

At first blush, this makes Patreon payments taxable. It also makes Patreon’s cut, or service fee, a business expense, if you are running a small business and filing a Schedule C. The things that are exempt from being income are very limited. Almost none of them can even come close to being stretched to allow Patreon contributions to be non-taxable.

Most of this would apply to Patreon alternatives as well.

The one exception is gifts. Gifts are one of the things that is excepted from being income. So, if the contribution through Patreon is a gift, then it is not taxable. If it is ANYTHING ELSE it is taxable. (Note: there is such a thing as a gift tax. However, gift tax is paid by the person giving the gift, not the recipient, but only if it exceeds the annual gift tax limit.)

Here is the really important part though, GIFTS are tax-free, DONATIONS are not.

Are contributions from Patreon considered gifts?

This is the sticky part. A gift only counts as a gift if you get nothing for it. If you get something in return, no matter how small, then it is not a gift. And, if it is not a gift, then it is, unfortunately, taxable income.

Patreon by its very nature is about an artist or a creator DOING SOMETHING which is supported by others. That is income, even if the contributor doesn’t specifically “get” anything, the fact that you produced the podcast in exchange for those contributions means it’s taxable income, no matter how worthy or noble.

Remember, the exception for income purposes here is GIFTS not DONATIONS.

What Qualifies as a Gift?

You, an individual, cannot receive tax-free donations, you can only receive gifts. The distinction matters. Grandma giving you $200 because it’s your birthday is a gift (you did nothing, she expects nothing.) A $20 monthly contribution for your online comic is not a gift (you did something, contributors expect the comic will be made.)

Note: Although this is not spelled out anywhere, the IRS is more likely to believe something is a gift when it comes from someone you have an association with. One total stranger handing you money as a gift if believable, but 50 total strangers handing over cash and expecting nothing in return? That’s a tougher sell.

So, is Patreon considered a donation?

Are Patreon Donations Tax Deductible

For real world purposes, this all comes down to what gets reported to the IRS. If Patreon sends you a 1099-K or other tax reporting form for filing your taxes, that means they reported that amount to the IRS as income. The IRS will assume that these payments are income, and their computers will flag your return if the income you report doesn’t match.

Does Patreon Report to the IRS?

Pretty much the gold standard for reporting to the IRS is if somone else reports your stuff to the IRS as well. So, if Patreon reports your money, then you need to as well.

Patreon only sends 1099-K forms to people who earn more than $20,000 in the calendar year. Certain states have laws that require a 1099-K from Patreon for lower amounts. Residents of Illinois get a 1099-K for any amount over $1,000 in a year. Residents in Maryland, Massachusetts, Vermont, and Virginia all get 1099-K forms for any amount over $600 in a year.

If you get a 1099-K from Patreon, the IRS got a 1099-K with your name on it from Patreon. In this case you MUST report the income, even if you, or your tax professional, figure out a way to make such income non-taxable.

Even if Patreon does NOT report your payments, they are technically still taxable, but whether anyone ever notices is a whole other question. I mean if they forgot, maybe you forgot. The IRS audits a really low percentage of taxpayers, and thanks to budget cuts, it’s about to get even lower. So, in this case, if you didn’t include your Patreon contributions because you, in good faith, consider them gifts, and no one ever says otherwise, then, you are correct, by default, but that’s a risk you’ll have to take.

Eventually, someone will take this to tax court, and we’ll get an official answer.

The best bet then is to keep careful track of all your expenses because you can deduct them to help with the additional taxes on your Patreon income. You may not want to be a business, but being one is your best defense against having to pay taxes on your Patron income. As a business, you don’t have to match up your expenses to particular things. So, if you are, say, a writer or artist on Patreon and you set up a business, you can deduct all your expenses from paper, brushes, to paint, and even your website hosting fees.

Offset Patreon Donations and Income with Small Business Tax Deductions.

Depending on how much you earn with Patreon, you may be able to claim enough small business expenses to wipe out most of the Patreon income from your income taxes. This is so much easier if you set up a business. I recommend an LLC for a small side project. A home office deduction for your Patreon could end up making that income go away. Heck, it might even get you some business equipment (Cricut machine, laser printer) for free.

Consult a tax professional if you want to go the C Corp, S-Corp, or partnership route.

Bottom line: If your income gets reported, then you should report it too, unless you are willing to go to tax court. In that case, go ahead and take one for the team. Maybe you’ll win and no one will have to report their Patreon contributions. If your Patreon contributions do not get reported (that is, you don’t get any sort of 1099 from Patreon or their assigned) then, it’s your call. I won’t sit here and tell you not to report income, but if you really believe it is not income, then you should do what you think is correct.

The one thing you do NOT want to do is report it and then try and back it out with some sort of deduction or credit. That WILL NOT hold up. Either report it or don’t. Don’t try and get cute.

All information contained here is for educational purposes only. It is not advice on your specific tax situation. You are responsible for your income taxes. Consult with a tax professional for advice specific to you.

About the Author of Is Patreon Taxable

By Brian Nelson – Brian is a freelance financial writer and former Certified Financial Planner and financial advisor. He writes for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or tax advice. ArcticLlama, LLC,, and Brian Nelson, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own tax professional when making decisions regarding your tax situation.

10 thoughts on “Is Patreon Taxable Income?”

  1. As long as it’s not sue-able and backed-up by government force if you do not deliver on the promise it’s just a voluntary gift.
    lets say you have a gift shop selling t-shirts if you make clear that all money send is just a voluntary gift with no legal necessity for the receiver to send you the t-shirt there shouldn’t be any issue.
    If the government still wants their mob-protection money than they can go F themselves as there’s nothing to protect.

  2. My view is that its a gift, because its voluntarily given, is not in exchange for labor and is not subject to a contract nor was it given with the expectation of receiving something in return. Now, if you make certain content available to only paying Patrons and solicit the funds by saying things like “send this amount and I’ll do x” then you have hurt that argument a bit, although one could argue its still a gift because its voluntary to send you money, and that you would have produced the content anyway even if no gifts had been received.

    So I think unless you have done something to make it explicitly clear that only people who pay you get to see your content and you hold the production of said content out at some price….then you are solid ground claiming its all gifts.

    I’d just be mindful of what the nature of “gift” is, and make sure I didnt breech that definition consistently.

  3. I just withdrew all Patreon earnings (a whopping $130) from 2018 yesterday (now 2019). Do I count this as income in 2018 or 2019? Thanks.

    • Income is either counted when paid, or when earned, depending upon your accounting. Most individuals use “cash based” accounting. That being said, the money is yours, either way whenever you COULD have withdrawn it. As in if Patreon would have allowed you to withdraw it before December 31, then it is last year’s income. If you could not have withdrawn it until after January 1, then it is 2019 income.

  4. My Daughter, as a photographer, thinks Patreon would be a good fit for her.

    Her major question is does she HAVE to set this up as a small business, and file taxes on it separately, or would it be considered “other” income if filing jointly with her husband.

    She wants to do everything on the up and up.

    Thanks so much.

    • It’s always tough to answer individual questions both legally, and because there are a lot of “it depends” out there. However, income is income and must be reported; the IRS never waivers on that point. However, HOW she reports the income can vary. Generally speaking she will probably want to file her income on a Schedule C. In doing so, she will have the ability to also claim deductions for her business as well.

  5. This was by far the best article on the topic, and I’ve read pretty much everything online. Great job, thanks for touching every single possible topic.

    • Taxes apply to everyone with income, including those under 18. However, remember that the tax system is graduated meaning you pay more as you earn more, so small amounts are taxes lightly, or not even at all. In your situation, you’ll want to check with your parents because they are likely claiming you as a dependent which affects your particular amount that will end up being tax free due to your standard deduction amount. The up side, is that this counts as earned income if you want to be thinking far enough ahead to throw some of that cash into a Roth IRA.

  6. As someone who works at the IRS. Report Patreon as income. Just do it. The IRS right now is itching to go after any of these new media income sources. They also are trying their hardest to target bitcoin etc. Treat it just like a normal job and you’ll be safer.


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