Google withholding Tax from Adsense Payouts?

6 comments
Source Title:
Google Withholding Taxes from AdSense Checks
Story Text:

News reaches us that some publishers are reporting that Google have been withholding tax on Adsense cheques.

Some are saying that they've withheld up to 25% of publisher earnings without any kind of explanation.

UPDATE: rcjordan points out in the discussion below that this may be due to the US Gov's backup withholding rule

Comments

 

Sounds like the US taxman's "backup withholding" rule has kicked in, in which case G is doing exactly what they're supposed to be doing.

http://www.irs.gov/efile/article/0,,id=98145,00.html

Any US corporation with form 1099 payees is going to have this happen.

Probably a storm in a teacup

As far as I can see only 5 people in the WMW thread report tax witholdings.

My guess would be that it was more to do those account holders not filling in properly the tax form declaration that AdSense ask you to make, than wholesale witholding of tax by Google

 

Yep. And the US gov tends the backup withholding list of the 1099 payee numbers that do NOT match very closely. *And* I've personally had the Gov send notifications of mismatched payments in instances where I've double-checked the tax-ID card of the payee.

This is not to say that G hasn't made a clerical error, but from the outside looking in it appears to be a routine case of taxpayer-itus.

Updated

Thanks for that rc, i've popped that link in the original post.

Yes, was storm in a tea cup

The OP has now had a response from AdSense

Quote:
According to the tax information submitted in your Google AdSense account on Form W-9, your earnings are subject to tax withholding. As a result, we are required by the IRS to withhold 28% of your Google AdSense income.
Although we were unable to automatically withhold federal taxes from your Google AdSense payments in the past, this functionality was added as part of recent enhancements to our payment system. If you have indicated that you are subject to tax withholding, you will see a line item for tax withholding on your Payment History page.

Seems fair enough to me, on the input that he put on his tax info for AdSense

 

>this functionality was added as part of recent enhancements to our payment system.

HHH! Nice spin, they left out the part about the taxman chewing them a new one if they DIDN'T add that 'functionality.'

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