Canadian YouTube Creators – Google withholding U.S. Taxes
Content
Introduction
Why Google withholds U.S. taxes?
What Factors impact how much you are taxed?
Submitting tax info to Google
Conclusion
Introduction
In this Blog you will learn why Google withholds U.S. taxes, what factors impact how much you are taxed, and how to submit tax info to Google.
Why Google withholds U.S. taxes
If you are a Canadian YouTube creator, you may have already had taxes deducted from your U.S. earnings. Google has a responsibility under Chapter 3 of U.S. Internal Revenue Code to collect tax information from all monetizing creators outside of the U.S.. In certain instances, Google must deduct taxes when these creators earn income from views in U.S. These U.S. earnings can come from ad views, YouTube Premium, Super Cat, Super Stickers and channel memberships.
What Factors impact how much you are taxed?
How much will you be taxed? It depends on if your valid tax form has been submitted or not, how much your channel earns from U.S. views, and if your country has a tax treaty with the U.S. that you’ve claimed the benefits for.
Is your tax form submitted? Once your valid tax form has been submitted you can find your tax withholding rate in the payments section of AdSense.
Tax withholding rates are 0% to 30% depending on your country and are applied to your monthly U.S. earnings from AdSense.
If you want to calculate your U.S. earnings go to YouTube Analytics, then Advanced Mode, and select the data range you want to look at. We suggest setting the date range to look at the month you want to calculate. Click geography, and from here add a secondary metric. Select “Your estimated revenue” and “Your estimated revenue”. From there, find the U.S. in the list of countries below the graph to see your estimated U.S. revenue.
What happens if your tax form is not submitted? If Google does not have tax forms from you by the time these changes go into effect, and you have an individual AdSense account, they will be required by law to presume you’re a U.S. person. Until Google has your completed tax info, they may need to withhold up to 24% of your total earnings worldwide – not just on your U.S. earnings.
However, if you submit your tax info and claim a treaty benefit your tax rate might be reduced.
Canada has a tax treaty with the U.S. , so Canadian YouTubers may be eligible for a tax withholding rate of $0.
AdSense will automatically surface the opportunity to claim a treaty benefit.
To claim a tax treaty benefit you’ll need to provide your Canadian social insurance number or your Canada Revenue Agency Business Number in the tax identity section of the tax tool in AdSense.
Submitting tax info to Google
If you haven’t already submitted your tax info in AdSense, you should do it ASAP. Canadian Youtuber creators should submit either Form W-8BEN which is for individuals or Form W-8BEN-E which is for businesses.
You can follow the instructions below to submit your U.S. tax info to Google. Note that you may be asked to re-submit tax info every three years, and that only Latin characters may be used when submitting tax forms (due to requirements by the IRS);
- Sign-in to your AdSense account.
- Click Payments.
- Click Manage settings.
- Scroll to your “Payments profile” and click edit
next to “United States tax info”.
- Click Manage tax info. (You’ll be asked a series of questions to determine the appropriate tax form)
- On this page you’ll find a guide that will help you to select the appropriate form for your tax situation.
After you submit your tax information, follow the instructions above to check the “United States tax” info section of your Payments profile, and find the tax withholding rates that may apply to your payments.
Conclusion
In conclusion, as a Canadian YouTube Creator, it is important to submit your tax info to Google, to ensure that Google’s withholding tax is minimized.