Airbnb deducts U.S. tax but I live in Canada

[John2197]

Hello everyone,

I live in Canada and a host since September 2017. In August 2018, I got an e-mail from Airbnb which says that I needed to add my taxpayer information and I did. Since the beginning of September, the system started deducting some money under "tax holding" from my payouts and I thought that it was going to Canada Government. 

Yesterday, I decided to download my gross earnings as an excel table and noticed that there are USD deductions from my payouts. First of all, I am not related to the U.S. and all the currencies and bank/PayPal accounts are CAD. 

I sent a message to Airbnb help team and this is the answer from them to my e-mail:

"thank you for reaching out regarding your tax withholding.

If you haven't responded to our request to submit your taxpayer information yet, we're required to withhold 24% from your payouts and remit it to the Internal Revenue Service under a regulation known as 6050W.

You can avoid this by submitting your taxpayer information at Account > Payout Preferences. Here's a link that will work if you're logged into your Airbnb account: ***

Once we receive your information, we won’t withhold from your future payouts. However, any amounts that have already been withheld and remitted to the IRS can't be returned to you by Airbnb.

The total amount withheld will be included on any tax forms issued to you so that you may account for these withholdings on your income tax return. We always encourage consulting a tax advisor if you need assistance accounting for any withholdings that have been remitted to the IRS on your behalf.

For more information about US federal tax, visit our Help Center: ***

Living in Canada, being a taxpayer to Canada Government, renting out your house which located in Canada but deducted US federal tax? Does that make sense to anybody? 

And now, they said that they are not going to cut my payouts anymore, neither refund the deducted amount. We are talking about roughly US$1,000 which is an important amount for me. 

Anybody had the same situation? 

Thanks,

John

[The-Lake-At-Blue-Mountai0]

Hi there. This just happened to me where they randomly changed my Canadian property to a “US RESIDENCY” then they started taking 25% off and told me I can’t get it back. I’m going to first call them back. If this doesn’t get resolved, I’m going to escalate this through some other channels. We cannot have US companies extracting illegal taxes from Canadians. I will raise this with my Member of Parliament, too. 

[Nicole2084]

The same thing happened to me recently. Did you get any resolve from this?

[Saima10]

Hi, Same thing happened to me in 2019 airbnb never resolved it and now my payouts are again pending since Aug 6th. I receive an email from airbnb asking to update account information to avoid pause in your payouts.. information asked is US tax number that is called TIN number that obviously I dont have as I pay tax in Canada. It has been 3 weeks issue not resolved and my payout total amount CAD 40,000 is pending.

[Colleen253]

 @Nick @Stephanie Why is this happening, what bug is causing it, and why is it still an issue in 2021? See latest comments from yesterday. This needs investigated. 

@The-Lake-At-Blue-Mountai0 ".This just happened to me where they randomly changed my Canadian property to a “US RESIDENCY.” 

This platform is so bug ridden it isn't even funny. It's also not that secure. I make a habit of checking my settings and activity log in detail daily (I've had settings spontaneously change - tied to bugs), and change my password frequently. I could not find anywhere in my account where listing country of origin is noted. This scares the crap out of me.

@Saima10 @Nicole2084 

[Nicole2084]

[Nicole2084]

This is the response I got from the first time I called 4 days ago. My IP address changed in their system therefore determining me a US resident and therefore auto charged my accounts to withdraw for US tax withholding. It makes no sense. I live in Canada, am a Canadian citizen and all of the addresses of my properties are in Canada. I have since talked to 5 different agents telling me it’s a sensitive issue that’s above their level and someone will get back to me. Meanwhile thousands of dollars since the beginning of august are being withheld. I’m at a loss as of what to do. I’ve been a superhost for 6 years and it’s the only platform I use for 9 properties. @Saima10 @Colleen253 @John2197 @The-Lake-At-Blue-Mountai0 @Quincy @Stephanie @Katrina143 @Nick 

[Colleen253]

@Nicole2084 What a lot of nonsense, that message. The only thing that matters is fixing whatever is going on AND REFUNDING THE MONEY. What is highly suspect and disturbing, is this has been going on a long time it seems. How many other hosts has this happened to? 
@Saima10 @John2197 @The-Lake-At-Blue-Mountai0 @Nick @Stephanie 

[Brian2036 · Accepted solution]

 @John2197 @Nicole2084 @Saima10 

If Airbnb gets caught withholding taxes that they do not remit to the appropriate authorities they will be in a world of poop.

They do have a serious problem when it comes to American citizens who own rentals in foreign countries, however. 

The IRS is targeting foreign income of all kinds and the tax consequences are burdensome. Airbnb is  US corporation so it is easy for the IRS to mess with them.

We do declare the income from our Panama property although it is insignificant. Fortunately the Panamanian government isn’t nearly as greedy as the US IRS and hasn’t demanded that we pay them too.

On US tax returns one may deduct “foreign taxes paid” but it’s a huge pain in the behind to do so. I usually don’t bother with it.

 I think that if you are unfairly charged with US taxes you should contact your MP and maybe they can do something but I doubt that it will happen quickly.

There was a discussion regarding this five years ago:  https://community.withairbnb.com/t5/Help/Tax-Form-W-8BEN/td-p/39460/page/2

You might try calling US IRS customer service to ask how you can get a refund. They are usually quite good (compared to Airbnb CS) and will probably try to help you.

[Brian2036]

@John2197 @Nicole2084 @Colleen253 @Saima10 

I don’t understand how they can pay taxes on your behalf into the US Treasury if you don’t have a social security number or TIN in the USA.

Eventually someone is going to have to reimburse you. At least I hope so.

 I think I know the source of this terrible mistake. A few years ago Airbnb got fined by the US Treasury because some hosts were not paying taxes on their earnings and Airbnb got blamed for it. So now they are very worried about getting robbed again by the US government.

And their platform has a whole lot of problems.

[Colleen253]

@Brian2036 I highly doubt the money has left Airbnb coffers…..

[Sarah977]

Residency is determined by the IP address? Say what? So if a host happens to be travelling outside their home country and logs into their Airbnb account, their country of residency is changed by Airbnb? 

That's nothing short of insane.

[Rich-and-Yan0]

@Sarah977 Yes, I thought that was a strange message as well.

[Kristina46]

Nah... it's CS making up BS again. 

[Craig697]

John did you get this issue resolved? it is happening to me also. If you did figure it out let me know how you fixed it please.