ITIN for Upwork Freelancers: 2026 Guide to Avoiding 24% Withholding

Why Do Upwork Freelancers Need an ITIN in 2026?

Upwork is a US-based platform, and the IRS treats it as a payment processor for tax purposes. Every freelancer who earns income through Upwork must provide valid tax identification. For non-US residents without a Social Security Number, an ITIN is the only way to satisfy this requirement and maintain full access to your earnings.

Without an ITIN, Upwork applies backup withholding to every payment you receive. This is not optional for Upwork. It is a legal obligation under IRS regulations. Here is exactly what an ITIN does for you as an Upwork freelancer:

• Avoid 24% backup withholding on your gross Upwork earnings
• Complete the W-8BEN form in your Upwork tax profile to establish your non-US tax status
• Claim tax treaty benefits that may reduce your US tax obligation to 0%
• Receive full payments without Upwork holding back a portion of every payout
• File a US tax return if needed to recover withheld amounts or report income
• Open a US bank account for faster, cheaper withdrawals from Upwork

For a broader overview of how ITINs work across all freelancing platforms, see our parent guide on ITIN for freelancers.

How Does Upwork Backup Withholding Work Without an ITIN?

Upwork is classified as a third-party settlement organization under IRS rules. This means the platform is legally required to report payments made to freelancers and, in certain cases, withhold taxes on those payments. Understanding how this works is essential before you start earning on the platform.

When you create an Upwork account, the platform asks you to complete your tax information. Non-US freelancers are directed to submit a W-8BEN form, which declares your foreign status and allows you to claim treaty benefits. If you skip this step or cannot provide a valid ITIN, Upwork applies 24% backup withholding to all your payments.

The 24% rate is a flat percentage applied to your gross earnings before Upwork's own fees are deducted. So if a client pays $1,000 for your work, Upwork withholds $240 for the IRS and then takes its service fee from the remaining amount. Your actual take-home is significantly reduced compared to what it would be with proper tax identification in place.

This same withholding issue affects freelancers on other payment platforms. If you also receive payments through PayPal or Stripe, read our guide on ITIN for PayPal and Stripe to understand how backup withholding works across all major payment processors.

Should Upwork Freelancers Submit a W-8BEN or W-9?

One of the most common points of confusion for Upwork freelancers is which tax form to submit. The answer is straightforward: if you are a non-US person, you submit a W-8BEN. If you are a US citizen or resident alien with an SSN, you submit a W-9. Here is how they compare:

Your W-8BEN is valid for three calendar years from the date you sign it. After that, you need to resubmit. Upwork will notify you when your W-8BEN is about to expire. Make sure to renew it promptly to avoid any interruption in your withholding rate.

While a foreign tax identification number (TIN) can be used on the W-8BEN in some cases, providing your ITIN is the strongest way to ensure Upwork and the IRS correctly process your tax information. A foreign TIN alone may not be sufficient to prevent backup withholding in all situations.

What Is the 1099-K Threshold and How Does Upwork Report Your Income?

The IRS requires platforms like Upwork to report freelancer earnings using Form 1099-K. The current reporting threshold is $600 in gross payments during a calendar year. If you earn $600 or more on Upwork, the platform is required to report that amount to the IRS.

For non-US freelancers, the 1099-K reporting interacts with your tax status in an important way. If you have submitted a valid W-8BEN with your ITIN, Upwork knows you are a foreign person and may instead report your payments on Form 1042-S, which is the form used for income paid to foreign persons. Either way, having your ITIN on file ensures the IRS can match your tax identity to the payments you received.

If Upwork withheld taxes from your payments and your actual US tax liability is lower (or zero under a tax treaty), you can file Form 1040-NR to claim a refund. Your ITIN is required on this return. For detailed guidance on filing, check out our guide on ITIN tax returns.

How Do You Apply for an ITIN as an Upwork Freelancer?

The ITIN application process is the same regardless of which freelancing platform you use. Here is the complete process from start to finish, tailored to what Upwork freelancers need to know.

Which Banks Work for Upwork Withdrawals with an ITIN?

Upwork offers several withdrawal methods, including direct deposit to a US bank account, PayPal, Payoneer, and wire transfer. Having a US bank account gives you the fastest and cheapest withdrawal option. With an ITIN, you can open a US bank account and receive your Upwork earnings directly in USD.

Wise: The most popular choice for international freelancers. Wise gives you a US bank account with routing and account numbers that work with Upwork's direct deposit option. You hold funds in USD and convert to your local currency at the mid-market rate when ready. Wise accepts ITIN holders and charges no monthly fees.

Payoneer: Many Upwork freelancers already use Payoneer because it integrates directly with the platform. Payoneer provides a US receiving account and offers a prepaid Mastercard for direct spending. The conversion fees are slightly higher than Wise, but the Upwork integration makes it a convenient option.

Mercury or Relay: If you have a US LLC with an EIN, you can open a full business bank account. These offer standard banking features including ACH transfers, wire transfers, and debit cards. Both accept ITIN holders for personal identification verification.

For a complete breakdown of banks that accept ITIN holders, see our ITIN bank account guide. We also have specific setup guides for Wise accounts, Mercury Bank, and Relay Bank.

What Are the US Tax Obligations for Non-US Upwork Freelancers?

Understanding your US tax obligations as a non-US Upwork freelancer is important for staying compliant and avoiding penalties. The good news is that most freelancers who work entirely from outside the US have limited (or zero) US tax liability under applicable tax treaties. Here is what you need to know.

Service income from outside the US: If you are a non-US resident performing all your freelance work from your home country, your Upwork earnings are not considered US-source income. Most tax treaties classify this as personal service income earned in the freelancer's country of residence. This means the US has no taxing rights over this income, and your withholding rate should be 0% once you submit a proper W-8BEN with your ITIN.

Effectively connected income: If you perform any work while physically present in the US (for example, during a visit or temporary stay), that portion of your income may be classified as effectively connected income (ECI). ECI is subject to US taxation and requires filing Form 1040-NR. If all your work is done from outside the US, this does not apply to you.

Recovering withheld amounts: If Upwork withheld 24% from your earnings before you submitted your W-8BEN, you can file a US tax return (Form 1040-NR) at the end of the year to claim a refund. You will need your ITIN, your 1042-S from Upwork showing the amount withheld, and the applicable tax treaty article to support your claim.

Home country obligations: Even if you owe zero US taxes, you likely need to report your Upwork income on your home country tax return. Most countries tax their residents on worldwide income. Keep detailed records of all Upwork earnings, platform fees, and any US taxes withheld for your home country filing.

Need help filing a US tax return to recover withheld amounts? See our detailed guide on filing a tax return with an ITIN.

How Does itin.so Help Upwork Freelancers Get an ITIN?

We have helped thousands of freelancers get their ITINs, and we understand the specific needs of Upwork professionals. Our service is designed to get you from application to approved as quickly and smoothly as possible, so you can stop losing money to withholding and focus on growing your freelance business.

Here is what our service includes:

• Complete W-7 preparation with all supporting documentation reviewed and organized
• Certifying Acceptance Agent verification so you keep your passport throughout the process
• IRS submission with tracking and status updates
• Upwork tax profile guidance on completing your W-8BEN once your ITIN arrives
• 100% money-back guarantee if the IRS declines your application

Our Standard service costs $197 with 7 to 10 business day preparation. Our Express service costs $297 with 2 to 3 business day preparation and priority support. Both plans include full W-7 preparation, document verification, IRS submission, and application tracking.

Every month you freelance on Upwork without an ITIN, you lose 24% of your gross earnings. For a freelancer earning $5,000 per month, that is $1,200 per month going straight to the IRS as backup withholding. The cost of our service pays for itself within the first payment cycle for most freelancers.

Not sure if you qualify? Our ITIN eligibility quiz takes 2 minutes. Want to know the complete document list? See our ITIN documents checklist. Worried about processing time? Our ITIN processing time guide breaks down every step. If you also work on other platforms, check our guides for gig economy workers and YouTube creators. Have questions? Reach out via WhatsApp or start your application online. We respond within one business day.