Request for feedback on New US Tax requirements

[Scott]

Hi Folks!

Starting Jan 1, 2022, because of the new tax information reporting requirements in the US, hosts who are identified to have a US tax information reporting obligation will need to provide their Taxpayer Information (TPI) to Airbnb for year-end tax reporting purposes. 

If hosts do not provide this information, Airbnb has an obligation to withhold up to 30% of their payouts. These amounts will be remitted to the IRS. Since tax withholding payments are matched using tax identification numbers, if a 1099/1042-S form is issued without this information, it may be very difficult if not impossible for hosts to claim this withholding credit on their tax return. 

Airbnb therefore is going to do everything it can to encourage hosts to provide us with their TPI.  However, we realize that not every host will provide their TPI so we need to decide between two options for hosts who do not provide TPI by Jan 1, 2022. 

Which do you think is the better approach for hosts who do not provide their TPI:

1. Up to 30% of payouts are withheld immediately. The remainder of earnings will be paid out. The host still needs to provide the TPI information to receive an accurate 1099/1042-S form, which they can use to claim withholding credit on their tax return. If they don’t provide a TPI information when file taxes in the Spring of 2023 with the IRS, the host cannot claim withholding credit.
   
   
2. TPI will be required as a part of having a valid payout method.  Payouts will not be processed until TPI is added as a part of payout method setup.  After TPI is added and verified, 100% of payouts will be released to hosts.

Which one do you think is the better approach for hosts who do not provide their TPI?  Thank you for your feedback!

[Mike-And-Jane0]

@Scott How refreshing to see at least one person in Airbnb is trying to find the best approach for hosts - Thank you.

I believe the best approach would be to withhold 30% provided you can include a notice in each payout saying that this has been done. Not providing any payout will just lead to more complaints that Airbnb have not paid hosts.

Also it would be worthwhile making sure Customer Services are well trained on explaining to hosts why their payments have been reduced (or withheld if that is the route chosen) as well as asking the CC moderators to chime into non-payment posts with possible issues that should be checked.

I hope you have a good database of hosts to whom this will apply so that we don't get caught up in this initiative!

[Scott]

Thanks @Mike-And-Jane0 that's helpful!

Anyone else have a preference?

[Ann72]

Hi @Scott.  I was searching my junk folders for 2021 tax information from Airbnb, and found all the notifications, like the one about this post, that I had never received.  I'm so sorry not to have responded!

I like the second option - require it when payout methods are set up.  My other business receives funds from around the world, and we do our best to prevent any withholding of funds because they're usually difficult to extract after the fact.  We however are dependent on the whims of the IRS, who have one tiny office devoted to the obscure tax form we're required to submit for each country.  And they closed that office without notice during the pandemic  🤦‍♀️ 🤦‍♀️ 🤦‍♀️