Summary

Non-US Medium writers, particularly those in Canada, faced a 30% tax withholding on their earnings by the US government starting in January 2020, due to a law affecting royalties paid to foreign persons.

Abstract

The article discusses the impact of a US tax law on non-US Medium writers, which mandates a 30% withholding tax on their earnings from the platform. This tax is applied because Medium earnings are classified as royalties, and the law requires taxes to be paid in the country where the royalties originate. Canadian writers, including the author, are particularly affected, as they are subject to double taxation—paying taxes both in Canada and the US. The author expresses frustration over the lack of benefit from US social security and the economic impact of the tax, especially since it was enacted during the Trump administration, which is perceived as greedy and exploitative. The article also highlights the short notice given by Medium regarding this change, leaving writers with limited time to adjust their finances before the new year. However, an update reveals that Canadian writers can claim an exemption under a treaty agreement, and the author encourages writers from other countries to check if they qualify for similar exemptions.

Opinions

The author feels that it is unfair for non-US Medium writers to pay US taxes when they do not benefit from US social security systems.
The author directly criticizes the Trump administration for enacting a law that seems to be driven by greed and a desire to extract money from non-US residents.
There is a sense of betrayal and disappointment towards Medium for not providing sufficient notice about the tax change, which affects the livelihood of writers who rely on the platform for income.
The author initially felt nauseous and later became outraged upon learning about the 30% tax withholding on their Medium earnings.
The article conveys a sense of urgency and stress for writers who must now scramble to make up for the lost income due to the tax withholding.
The author expresses gratitude towards the Medium community for providing information about the treaty agreement that exempts Canadian writers from the tax, but remains concerned for writers from countries without such agreements.

Non-US Medium Writers are Facing a 30% Loss in Earnings to US Taxes in 2020

We don’t live there, and we don’t benefit from the social security system, but SURE let’s pay 1/3 of our money to the US government just because the Giant Cheeto says so.

Last night, I went from feeling hopeful about my future on Medium to dissolving into tears.

I live in Canada. 1/3 of my overall income comes from my Medium earnings. I spend a minimum of 3 hours, often more, on this platform every single day to write and publish my creative work.

Last night, around 8 pm AST, I received an email from Medium Partnerships that said, effective January 2020 and onward, taxes would be withheld from my earnings and paid to the US government.

Due to Medium writers still fully owning the work we publish, earnings are not considered 'income’. Instead, we receive 'royalties' for our work, and this tax law dictates that taxes are due to the place in which these royalties originally reside — being the US, as Medium is a US company.

The email did not indicate what percentage of taxes would be removed, but once I visited my Medium Partner Dashboard, the number was confirmed and jumped right out to me:

30%.

I truly felt nauseous when I saw that number.

I’m paying taxes in two separate countries — and I only live in ONE of them.

As a business owner, I pay 30% in taxes to the Canadian government every April.

This goes towards our free healthcare system, and social security programs that make our country the supportive place that it is. We look out for our own in Canada (or at least, we try our best to do so).

But now, I will be paying the equivalent in taxes to the US government, to enhance their social security and economy, even though I will never benefit from the direct investment I am unwillingly putting in.

That means the US government will get the initial 30% of my Medium earnings, and then once whatever is remaining crosses the boarder to me, the Canadian government will take their 30% share in taxes come April (which, you know, actually makes sense because I’m a Canadian resident).

Canadian. Not American.

Seriously, why it’s the US government getting my money!?

That Giant Cheeto is robbing me blind from across boarders.

This Withholding Taxes for Foreign persons receiving royalties law came into effect in 2018.

Why? Because Trump is determined to get every penny he can out of every human being in every country on this planet — because he’s that much of an entitled pig.

And so he made a law that will see to his legally robbing of me, an honest and hardworking Canadian small business owner, of my creative earnings that I worked my a** of for.

It literally makes no sense to me. I’m numb with shock and outrage.

I’ve had a lot of reasons before now to despise that Giant Joke of a Cheeto sitting in the White House — and this is just another one to add to the list.

I just lost the equivalent of a significant client in my business.

With less than a month’s notice, I must now scramble to make up the difference in the loss of earnings I’m facing in January.

19 days before Christmas, and I now need to find one or two new clients before the new year to maintain my self-earned income.

I am admittedly disappointed that the Medium team delivered this news with such little notice. Less than 30 days — for someone like me who relies on my payouts from Medium to cover some of my life expenses, this was a shocking update to receive.

And I’m not the only writer that this is going to greatly impact.

The Medium writing community is an international one. Any writer who doesn’t reside in The United States is subject to this tax.

We’re all getting robbed blind. And for what?

Nothing other than pure greed.

Final word.

Upon receiving this email, and taking a few minutes to process, I headed straight to the Medium Facebook groups I’m part of and posted this information, asking if anyone else had received this email as well.

From the sounds, not many others had received this email yet. Just the lucky Canadians.

And those in Europe also have yet to see the disclaimer on their Partner Dashboard.

But that’s doesn’t mean they’re exempt from this tax.

The email from Medium, and the tax law itself, are very clear — any non-US residents receiving royalties from the US are subject to this tax law.

Try to avoid paying the taxes, and you’ll be subject to an added 30% late fee.

The US government is coming for our money — whether we live in their country or not.

And there’s nothing we can do about it.

IMPORTANT UPDATE FOR CANADIAN WRITERS

Thank you to my fellow Canadians who commented below, informing me that in Canada we are exempt from this Royalties Tax due to a treaty agreement.

If you are Canadian, pop into your Partner Dashboard, and click “Update Tax Information”. From there, refill your tax information under the W-8EN form, fill out the document including your SIN number, and below your SIN there will be a little block to click which activates your rights to the treaty agreement.

Thank you again to the Medium community who came to my rescue in my time of need! ❤

That said, I still have friends here on Medium who are not residing in a country with an active treaty agreement, and for them my anger and upset expressed in this article remains.

YOU COULD QUALIFY FOR EXEMPTION FROM THIS ROYALTY TAX

To see if your country also qualifies for you to claim your right to a Treaty Agreement, which would reduce or eliminate your responsibility to pay this Royalty tax, you can visit this Medium Q&A Tax page and scroll down to, “Will I lose a percentage of the earnings shown on my dashboard to taxes?”, or view the list of countries below, pulled from the Medium Q&A Tax page.

The countries indicated to have Treaty Agreements are: Armenia, Australia, Austria, Azerbaijan, Bangladesh, Barbados, Belarus, Belgium, Bulgaria, Canada, China, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, India, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Korea (South), Luxembourg, Mexico, Malta, Moldova, Morocco, Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Kingdom, United States, Uzbekistan, Venezuela

If your country is listed, pop into your Partner Dashboard, and click “Update Tax Information”. From there, refill your tax information under the W-8EN form, add you tax ID and click the Treaty Agreement box to claim your right to your country’s Royalties tax exemption.