Upwork Tax for Non US Freelancers
If you received an email similar to the picture below as a non-USA freelancer, this post is for you to understand why and what to do.
Upwork is a company that has its headquarters in San Francisco, California, in the United States. Hence, Upwork is subject to US laws, including US tax laws. Speaking of taxes, the Internal Revenue Service is the revenue service of the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law. U.S. citizens living abroad are still subject to U.S. income tax and must provide Upwork with a W-9 form.
Hence, the IRS needs to identify freelancers on Upwork that are subject to US taxes and freelancers that are not subject to US taxes. So, since Upwork is subject to the U.S. Internal Revenue Service (IRS), Upwork is to ensure that international freelancers fill out a new W-8BEN or W-8BEN-E form and that it has their tax identification number and current tax residence listed.
It’s important to complete the form by December 31, 2022; otherwise, Upwork must begin withholding U.S. income taxes from the freelancers’ earnings on Upwork. Without the W-8BEN form, U.S. tax law requires us to withhold up to 30% of your future earnings on Upwork and send the withholdings to the IRS. If you’re a Nigerian and you don’t have a TIN, you can get yours through the link in the description: https://www.jtb.gov.ng/apply-for-tin/ or go to the nearest FIRS office and ask for the TIN form.
Upwork encourages international freelancers to review and update their tax information as soon as possible here.
IRS uses the W-8BEN or W-8BEN-E forms to determine whether you live in the U.S. and what taxes, if any, are to be collected from your earnings on Upwork.
If you have a W-8BEN form submitted already, you have to refill the form to include your tax classification and tax identification numbers as required by IRS. Due to the IRS's recent change in reporting thresholds, Upwork needs to reconfirm this information.
TIN — Tax Identification Number has different names in different countries used for collecting your tax information, Some countries may use a national ID number. India uses PAN. In Nigeria, the number is issued by the Federal Inland Revenue Service (FIRS) upon successful registration as a taxpayer.
You can consult a tax advisor in your country or contact your local tax authority. Does filling out the TIN mean no tax will be charged to non-US Upwork freelancers? Will you be able to withdraw without updating the TIN or W-8BEN form? Watch the video below to find out these and more:
Tap the link in the Upwork tax email to re-fill the W-8BEN form or see tap this: www.upwork.com/nx/tax
Let me know if you have any challenges in my YouTube comment section:
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