YouTube and US New Tax Laws

We all watch videos on YouTube and some people creates videos on it. We can learn anything from YouTube and people are now earning from YouTube. Some creators are making YouTube as a primary carrier option to earn. But question is how much you can earn?

The answer is it depends on you. Many channels are earning more than USD 10 million by creating videos. So, if you are talented and passionate about YouTube you can also earn. The actual rates an advertiser pays varies, usually between $0.10 to $0.30 per view, but averages out at $0.18 per view. On average, a YouTube channel can receive $18 per 1,000 ad views, which equates to $3 – $5 per 1000 video views.

Ryan Kaji, a nine-year-old boy from Texas, has been named the world’s highest-paid YouTube star by Forbes Magazine. The boy has earned nearly USD 30 million in 2020 by unboxing and reviewing toys and games on his YouTube channel Ryan’s World.

Source India Today

There is also policy and regulation you should follow while making videos for YouTube. Your content should be creative and informative. You should also make sure that your video should not contain any part of song, music or any other cinematography which is secure by copyright or it is patented you can be strike on your channel for using other person content without permission. You cannot make hateful, abusive or sexual content on YouTube. You can read more about policy in below link.

Source YouTube

Now, let us discuss about taxes you must pay while earning from YouTube.

Some country has treaty with another country so person who are earrings outside from their home country had not to pay double taxes. This treaty called Double Taxation Avoidance Agreement (DTAA).

In other words, if your country has treaty with another country then you get relief to pay taxes in both the country.

Google has made a new announcement that will come as bad news for YouTube content creators in India and other parts of the world. Creators who are not based in the US will be subject to US tax withholding or deductions from their monthly earnings. The new policy does not affect USbased creators. The additional tax for non-US-based creators may start coming into effect from June 2021.

Further, Google will deduct taxes on YouTube earnings from viewers in the US on not just ad views, but this will include YouTube Premium, Super Chat, Super Stickers and channel memberships, according to a support page.

Google’s post on the support forum says that “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 is not provided by May 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide.”

YouTube has informed creators about the update and has asked them to provide their tax information in their AdSense account as early as possible. If a creator is not able to provide the information by May 31, the company said that it might need to deduct up to 24 percent of their total earnings worldwide.

However, if a creator has provided their tax information, there will be a withholding between 0–30 percent on the earnings they generate from viewers in the US. The withholding rates notably depend on whether the country of the creator has a tax treaty relationship with the US. This means that there will be variation in the deduction of taxes for creators in different countries.

If your creator account classifies as a Business Account, the default withholding rate will be 30% of the US-viewer earnings.

If your creator account classifies as an Individual Account, backup withholding will apply, and you will pay 24% of the total earnings worldwide.

Google has also mentioned in its official post that “these withholding rates will be adjusted in the next payment cycle once valid US tax info is provided in AdSense.”

Specifically, for India, the withholding rate is set at 15 percent of the total earnings a creator gets from viewers in the US.Indian creators, thanks to the Double Tax Avoidance Agreement between India and the US, will have to pay around 15% of their YouTube ad revenue coming from their US viewers.

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