In the era of the digital economy, whether or not the Internet can leverage the advantages of the Internet and information technology to promote balanced income growth among rural residents is an important focus in implementing the strategy for rural revitalization. Existing literature has already confirmed the positive effect of the Internet on farmers’ income growth. However, from the perspective of the income gap, research on the impact of the internet on income disparity within rural areas is relatively lacking, and much of it is based on macro statistical data and individual surveys. Can Internet usage help narrow the intra-rural income gap? There is still insufficient research and evidence on this issue. Based on three waves of data from the China Labor-force Dynamics Survey (CLDS) in 2014, 2016, and 2018, this paper empirically studies the impact of internet usage on the intra-rural income gap at the village level. The research revealed that internet usage not only had an overall income-generating effect at the village level, and this effect could effectively help push low- and middle-income groups in rural areas to increase their income, thereby narrowing the income gap. The results remained robust after adjusting for sample ranges, replacing the dependent variable and core explanatory variables, and using the instrumental variable method. However, there are restrictive conditions for the impact of Internet usage on income disparity. The analysis using the Generalized Propensity Score Method (GPSM) indicated that when the intensity of Internet usage exceeded 0.4, its usage could significantly reduce the income gap in rural areas. Further research demonstrated that service industry and labor skill upgrading were the possible mechanisms by which the Internet could decrease the income gap. Compared with existing research, this paper expands in two ways: firstly, it uses the village as the basic spatial carrier of rural society to explore the impact of internet usage on income disparity within rural areas from a relatively medium-term perspective. Secondly, it adopts the generalized propensity score matching model to identify the applicable interval for the influence of internet usage on the intra-rural income gap, revealing the constraints of the “welfare effect” brought about by the internet. That is, the “welfare effect” is limited by a certain level of internet development. This research reflects to a certain extent the inherent logical relationship between the development of digital technology and the fair distribution of income. Therefore, it provides empirical evidence for the further penetration of the Internet and information technology into rural areas and for promoting balanced income growth among rural residents. Currently, the digital dividend effect in rural areas is still in the diffusion stage, so we are supposed to fully leverage the effects of Internet usage on the income growth of rural residents, improve the inclusive nature of Internet development, and facilitate the deep integration of the Internet with rural application scenarios, making rural residents enjoy more development opportunities brought about by the “digital dividend”.