Google will soon deduct taxes from YouTube creators outside the U.S.
Google will be required to deduct U.S. taxes from payments to creators outside of the U.S. later this year (as early as June 2021).
For a Youtuber outside the U.S. whose tax info isn’t provided by May 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide.
According to Google, the outfit “has a responsibility under Chapter 3 of the U.S. Internal Revenue Code to collect tax info from all monetizing creators outside of the U.S. and deduct taxes in certain instances when they earn income from viewers in the U.S.”
How will my earnings be impacted?
If you provide your tax info, U.S. taxes may only be applied to your monthly U.S. earnings from AdSense (revenue earned from viewers in the U.S. through ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships). If no tax info is provided, your tax rate may default to the higher individual backup withholding rate (24% of total earnings worldwide).
What do I need to do?
In the next few weeks you will receive an email to submit your tax information in AdSense. The online tax tool in AdSense is six steps and will ask you a series of questions to guide you through the process to determine if any U.S. taxes apply.
How to submit Tax Information in AdSense
1. Sign in to your AdSense account.
2. Click on “Payments” in the left tab.
3. Click on “Manage Settings” on the Settings option.
4. In the Payments profile tab, click on “United States tax info”
5. Click Manage tax information.
Similarly, once you login to your AdSense, you will see a notification to add Tax Info if you haven’t done so already. You have to click on “Manage Tax Info” It will send you direct to step 4.
For creators outside of the U.S., Google will soon be updating our Terms of Service where your earnings from YouTube will be considered royalties from a U.S. tax perspective. This may impact the way your earnings are taxed, and as required by U.S. law, Google will deduct taxes.