YouTube Will Deduct 24% Taxes From YouTubers.
YouTube has became one of the biggest source of income for many people. People all over the world are earning lots of money from YouTube.
Earning on YouTube has been very simple. Because YouTube pays 55% of the Ads income to its Content Creators and keeps 45% to itself.
Rest there is no other charges on YouTube. So YouTuber can earn as much as more money he can through sponsorships, etc.
But on 9th March 2021, YouTube sent an email to those YouTubers who have their channels monetised.
What is this mail about?
As per this mail, Google may begin deducting US taxes on earnings that you generate from viewers in the US as early as June 2021. So you must submit your US tax info in AdSense as soon as possible. If your tax info isn’t provided by 31 May 2021, Google may be required to deduct up to 24% of your total earnings worldwide.
Yes you heard it right. If you are a YouTuber then this news might have hurt you from inside that YouTube Will Deduct 24% Taxes From YouTubers
And this is applicable to only those YouTubers whose channels are monetised or those whose channels are not monetised but still they have created Google Adsense account.
So in this article we will learn about this new Tax system on YouTube.
All monetising 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 31 May 2021, YouTube Will Deduct 24% Taxes From YouTubers
When YouTube Will Deduct 24% Taxes From YouTubers?
Every YPP creator, regardless of their location in the world, is required to provide US tax info to Google. Under US tax law, Google is required to deduct taxes from your YouTube earnings from US viewers, if applicable. 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.
• Creators outside of the US: If you submit US tax info, withholding rates are between 0% and 30% on earnings that you generate from viewers in the US and depend on whether your country has a tax treaty relationship with the United States.
• US creators: Google will not withhold taxes on earnings if you have provided valid tax info. Most US creators have already submitted their US tax info.
Important Point: If no US tax info is provided, Google may be required to withhold using the maximum tax rate. Your tax rate will depend on your AdSense account type and country:
• Business account type: The default withholding rate will be 30% of US earnings if the payee is outside the US. Businesses in the US will be subject to 24% withholding on total earnings worldwide.
• Individual Account Type: Backup withholding will apply and 24% of total earnings worldwide will be withheld.
These withholding rates will be adjusted in the next payment cycle once valid US tax information is provided in AdSense.
How will this affect my income on YouTube?
Only the portion of your earnings from viewers in the United States will be subject to tax withholding and reporting if you provide valid tax information.
The exact rate of tax withholding will be determined by the tax info that you provide to Google. You can view your tax withholding rate in the Manage tax info section in your AdSense payment settings once you’ve submitted your form. Tax withholding amounts are not visible in YouTube Analytics.
Here’s an example: A YouTube creator in India in the YouTube Partner Programme earns $1,000 USD from YouTube in the last month. Of the $1,000 USD, their channel generated $100 USD from US viewers.
Here are some possible withholding scenarios:
• Creator doesn’t submit tax info:
The final tax deduction is $240 USD because the withholding tax rate is up to 24% of total earnings worldwide if they haven’t submitted tax info. This means that until the creator submits complete tax info, we’ll need to deduct up to 24% of their total earnings worldwide, not just their US earnings.
• Creator submits tax info and claims a treaty benefit:
The final tax deduction is $15 USD. This is because India and the US have a tax treaty relationship that reduces the tax rate to 15% of earnings from viewers in the US.
• Creator submits tax info but is not eligible for a tax treaty benefit:
The final tax deduction will be $30 USD. This is because the tax rate without a tax treaty is 30% of earnings from viewers in the US.
What if I don’t earn revenue from viewers in the US on my channel?
All YPP creators should submit tax info to Google regardless of whether they earn revenue from viewers in the US. In case you earn revenue from viewers in the US in the future, submitting your US tax info will help determine the correct withholding rate for you.
Will Google be withholding other non-US taxes from my YouTube earnings?
At this time, Google is only required to withhold US taxes from your YouTube earnings.
Does this apply to my other AdSense earnings aside from YouTube?
If you provide valid tax info, the US withholding taxes under Chapter 3 should only apply to your YouTube earnings.
How To Submit tax info in Google Adsense?
First you have to open your Google Adsense Account.
Then you have to click on notifictaion icon on right side at the top of your Adsense homepage. And the you have to click on manage Tax info.
Then you have to click on add Tax info option to proceed further.
Then you will get 3 options. In first option you have to select individual if you are a individual YouTuber. Or else you have to click on Non individual if you are a company or a organisation.
In second option you have to click on No if you are not a US citizen.
And then in third option you have to click on W-8BEN option to claim Tax Treaty benefit. And finally you have to click on next option to proceed further.
In next step you have to enter your name, then you have to leave second option blank.
Then you have to select country of citizenship.
After that you have to enter Foreign TIN( Tax Indentification Number)
If you are a Indian then you have to enter your PAN number in Foreign TIN option.
And if you are from other country then India, you have to input your Foreign TIN document detail which you can find on Google.
Again you have to leave final option blank and click on next to proceed further.
Now you have to tick the box of permanent address and then enter your address below.
But remember one thing that you have to enter same address which you have used while making your adsense account.
after filling up the address you have to tick the box of Postal adress is same as the permanent address and then click next to proceed further.
Now select all the details exactly same as shown in the image below and then click next to proceed further again.
After this you have to tick the box of i confirm that and the again click on next to proceed further.
Now you have to enter your Legal name and then click on yes i am the person listed in the signature section.
and then again click on next to proceed further.
Again you have to select all the details same as shown in the image below except 2 options which you have to select as per your YouTube income status.
If you have ever received payment from YouTube then you have to click on i am providing tax info for existing payment and then tick the box below.
But if you have never received any payment from YouTube then you have to click first option which is:- i am providing tax info for new or existing payment.
and then click on submit.
At last you will see this type of interface with Satus Approved. Which means your form has been submitted successfully.
And then finally you will get a mail from Google saying your tax information has been approved successfully.
This way you can submit Tax info in your Google Adsense Account.
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You can also read my Article on How To Watch 4K Videos On YouTube From Android Phones