You may have seen a message from YouTube requesting for your tax details before your earnings can be paid to you. May be you saw this message, “Your YouTube payments are on hold as you’ve account issues to fix.” Then you saw this; “To make sure your payment is included in the next payment cycle, please provide your tax information. This will take a few minutes.”
You are likely to get worried because you don’t stay in the United States where you can easily provide tax information required by YouTube. You might then be wondering what happens to those living outside the United States? How do they take care of this problem? What does this statement even mean? Well, this article provides an insight that could be of help to you.
First thing is to know that YouTube has announced back in 2021 that it will start deducting U.S taxes for all creators on its platform, including Nigeria on the earnings they generate from viewers in the US. The company’s new policy took effect from June 2021.
Back then, YouTube made a statement on the deduction: “We’re reaching out because 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).
“Over the next few weeks, we’ll be asking you to submit your tax info in AdSense to determine the correct amount of taxes to deduct, if any apply. 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.”
This change applies to all creators outside of the US, including the ones in Nigeria. But there won’t be any similar tax deduction for creators living in the US.
According to a statement on Google’s support page, Google 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.
That means that only income earned will be affected, but only that earned from viewers within the United States.
When this policy was introduced, YouTube asked creators to provide their tax information in their AdSense account as early as possible. Any creator that was not able to provide the information by May 31, 2021 the company said that it might need to deduct up to 24 percent of their total earnings worldwide. This could negatively affect many creators who rely on the platform to make a living. It then means YouTubers need to work extra hard to make money from the platform.