Google has announced that it will begin withholding U.S. taxes on earnings content creators in the YouTube Partner Program (YPP) from around the world generate from viewers in the U.S. effective as early as June 2021.
The search giant, in an email to all YouTubers said that it has a responsibility under Chapter 3 of the U.S. Internal Revenue Code to collect tax info, withhold taxes, and report to the Internal Revenue Service (the U.S. tax authority, also known as the IRS) when a YPP creator on YouTube earns royalty revenue from viewers in the U.S. Meaning if you are a content creator and have viewers from US and earn from YouTube, this policy will now start affecting your earnings.
“All monetizing creators on YouTube, regardless of their location in the world, are required to provide tax info. Please submit your tax info as soon as possible. If your tax info isn’t provided by May 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide,” said Google in its official communication.
It is important to note that you won’t have to pay tax for the money you make from viewers outside the US even if you’ve provided the relevant tax documents as required by the company. But don’t choose to ignore the communication as you will have to lose a massive 24% tax on your entire monthly earnings from YouTube worldwide. It is therefore advisable that you visit Google’s support page for relevant tax information and documentation before the deadline catches up with you.
The tax withholding requirements can differ depending on your country of residence, whether you’re eligible to claim tax treaty benefits, and whether you identify as an Individual or a Business. So for creators outside the US, if you submit U.S. tax info, withholding rates are between 0-30% on earnings you generate from viewers in the U.S. and depend on whether your country has a tax treaty relationship with the United States. YouTube says these withholding rates will be adjusted in the next payment cycle once valid U.S. tax info is provided in AdSense.
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