Tag Archives: cwa

International Musician, Recent News

Dozens of Ontario Newspapers Cease Operations

A swap deal between Postmedia and TorStar will see 36 newspapers shuttered—all but two of them in Ontario. The two organizations are swapping a total of 41 daily and weekly newspapers. Postmedia will close 23 of the 24 publications it takes over, putting 244 people out of work by mid-January. TorStar will immediately shut down 13 of the 17 newspapers it acquired from Postmedia and lay off 46 staff.

Communication Workers of America (CWA) Canada President Martin O’Hanlon called it a “dark day for local journalism” and said it is a “deathblow to local newspaper competition in many communities.” O’Hanlon added, “it’s bad for local journalism and bad for municipal democracy.”

CWA Canada represents workers at the Peterborough Examiner, which will continue to operate under TorStar, and at Northumberland Today, one of three dailies that will shut down immediately. With the exception of Exeter Times-Advocate/Weekender, Postmedia plans to close all of the community newspapers it acquired. Of the 17 newspapers acquired by TorStar, only four dailies will survive.

International Musician, Recent News

CWA Asks Corporations to Make Worker Pay Pledge

The Communications Workers of America (CWA) has asked companies where its members work (Verizon, AT&T, and six others) to pledge in writing that they will increase employee pay if Congress cuts corporate taxes. Specifically, CWA has asked for them to commit to giving workers a $4,000 raise for every year that the corporate rate is reduced to 20%.

“We are going straight to the people who know how corporations plan to spend the billions of dollars being handed over to them—the CEOs—and asking them if they intend to keep the promises that Trump is making on their behalf,” says CWA President Chris Shelton.

The Trump administration has claimed that, if the corporate tax rate were cut from 35% to 20%, a typical American would make $4,000 more per year. No companies were willing to make the pledge.

Traveling Musician

Central Withholding Agreements in the US

If you are a nonresident alien (non US citizen) entertainer performing in the US, you are subject to 30% tax withholding from gross income. There are situations in which the withholding requirement does not apply (certain corporations, nonprofit organizations, and certain treaty provisions), but generally most artists should take advantage of central withholding agreements (CWA) with the US Internal Revenue Service (IRS) to reduce this withholding amount.

A CWA is an agreement entered into by the entertainer, a designated withholding agent, and an authorized representative of the IRS. The agreement can cover one event or a tour and the withholding percentage required will be based on an income/expense budget provided by the artist, indicating net profit/loss. In order to access a CWA, your previous US income tax returns must be filed and US taxes paid (or you have arrangements to pay). You also must file a US tax return for the year in which the CWA is granted.

A designated withholding agent must be a completely independent third party (often, it is a venue, agent, manager, accountant, attorney, etc.). The agent is required to withhold and forward to the IRS withholding tax according to the terms of the CWA and provide a final accounting of the artist’s income and expenses.

The advantages of a CWA is that it allows for one withholding agent (rather than several, as on a tour) and the withholding percentage is based on the estimated ultimate tax liability, rather than the blanket 30% withholding required by law. Only individuals may apply for a CWA and for groups of artists in a band or other ensemble, each artist must apply separately.

Filing a CWA application should include:

  • Application form 13930
  • Itinerary of events to be covered by the CWA
  • Income/expense budget with contracts, deal memos, projected merchandise sales, etc.
  • Power of Attorney or Appointment of Representative form

The regulations for applying are extremely strict in regard to the application date. If the application is received less than 45 days prior to the first event on the CWA application, it will be rejected. The optimum time to apply for a CWA is 90 days before the first event. If you cannot meet these deadlines and the 30% is withheld, you can always apply for a refund (if one is applicable) by filing a US tax return for the year in which you had monies withheld.

When a CWA has been fully executed and signed by the entertainer, the designated withholding agent, and the representative of the IRS, the designated withholding agent assumes responsibility for withholding and reporting tax on the entire tour or event, relieving all other withholding agents from withholding, and eliminating the chances of over-withholding.

Sometimes a foreign entertainer will try to rely on the submission of W-9 or W-8BEN forms or assume that they can rely on a tax treaty provision that allows a certain level of tax-free income. Strictly speaking, the W-9 or W-8BEN form does not negate the withholding because the income is treated as flowing directly to the artist (unless an arm’s-length corporation is involved). Any treaty provisions cannot be considered since the amount of income earned will not be determined until the year’s end. There are, however, certain countries (Armenia, Azerbaijan, Belarus, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Moldova, Poland, Russia, Tajikistan, Turkmenistan, and Uzbekistan) with a treaty-based provision that exempts all US earned income from taxation.

A CWA is a something every foreign artist coming to perform in the US should consider.

—I welcome your questions and concerns.
Please write to me at: robert@bairdartists.com. While I cannot answer every question I receive in this column, I will feature as many as I can and I promise to answer every e-mail I receive.