PayPal says, Confirm your US Taxpayer Status... what if I'm not one?

October 10, 2024 10:33 AM

I just got an email from PayPal asking me to Confirm my US taxpayer status. But I'm not one.

I have a creator account on Patreon and just withdrew a small amount of money from it (about $200). When the money landed in my PayPal account, I immediately got this message (ie, the timing is so accurate that I know it's not spam):

Confirm your US taxpayer status to avoid backup withholding
US tax laws have changed, but we’ll help you keep getting paid easily
The US Internal Revenue Service requires us to send you US tax form 1099-K when you receive $600 USD or more for goods and services each year.
Because of a change to US tax laws, you’ll need to confirm your US taxpayer status, too.
What happens if you don't confirm your US taxpayer status:
When you reach $600 USD, your payments will go on hold. You can confirm your US taxpayer status by adding your US tax ID or certifying your non-US tax residency status.
If you don't confirm your US taxpayer status within 60 days, we’ll start sending 24% of your payments to the US Internal Revenue Service for backup withholding.
Learn more about how this tax ID hold may affect you.
Or, log in to PayPal and confirm your US taxpayer status to avoid a hold and 24% backup withholding when you’re paid.

I don't see an option for non US citizens.
From 2020 to now, I've made a total of about $2500 from Patreon.
Some years I will make over $600 from Patreon, but not in 2024 (only made about $200). The amount may go over the $600 limit in 2025, though.
Do I need to do anything?

posted by nouvelle-personne to Work & Money (5 answers total)

Is this not your situation? “certifying your non-US tax residency status”
posted by funkaspuck at 10:39 AM on October 10

(ie, the timing is so accurate that I know it's not spam):

Look very carefully at that again, sometimes these things are coincidences.
posted by mhoye at 10:56 AM on October 10

Their website directions are clearer than the email you received. You either need to provide your US Tax ID or you file a Certificate of Foreign Status.

If you don't do either, they'll take 24% of your deposits and send them to the IRS.
posted by mcgsa at 11:09 AM on October 10

Your "US taxpayer status" is that you are not a US taxpayer, and you can confirm this by filling out a W-8BEN, on which you'll need to put your name, address and "Foreign tax identifying number", which is broadly whatever number comes on the the top of the letter from the tax authority in your country - whatever the US tax authorities would need to check on you should they ever choose to do so.

(I'm in the UK, I fill out a W-8BEN every three years for another purpose; I put my National Insurance number on it, they seem happy with that)
posted by parm at 11:20 AM on October 10

I had to complete a W-8BEN-E for my incorporated business in 2017, and I used my corporate GST number as my "Foreign TIN (tax identifying number)". HOWEVER, you are probably not incorporated and given your level of income, you may not have your own GST number.

The W-8BEN parm mentions above (not quite the same form as what I used) may be appropriate. Sources like this give you an overview of the process (e.g. use your SIN as an individual if you don't have a GST number), but if you have an accountant friend, you might want to run this all past them.
posted by maudlin at 12:38 AM on October 11