EIN for PayPal compliance

PayPal collects U.S. taxpayer identification numbers (TINs) — SSN, EIN, or ITIN — to meet IRS and state reporting obligations and will request TINs via account notifications and email when accounts approach reporting thresholds.

Sole proprietors and single-member LLCs that are disregarded entities should provide the owner’s TIN (typically SSN) unless the owner obtains and uses an EIN. PayPal’s 2025 guidance reflects the restored federal Form 1099-K reporting threshold: $20,000 AND 200 transactions (per federal law change in 2025).

PayPal also notes several states have lower thresholds (Vermont, Massachusetts, Virginia, Maryland: $600; Illinois: $1,000 with 4+ transactions) and will report per state requirements where applicable.

PayPal will also issue a Form 1099-K for any customer subject to backup withholding during the year regardless of gross payments. Failure to provide accurate TIN information can trigger account limitations, tax holds, or 24% backup withholding.

PayPal tells users to update their taxpayer status via the Confirm Taxpayer Status flow and to ensure the TIN matches IRS records. For businesses, an EIN is the federal tax ID issued by the IRS.

The IRS issues EINs free online (SS-4 application / EIN assistant). Typical reasons to obtain an EIN include: hiring employees, operating a partnership or corporation, paying certain federal taxes, opening business bank accounts, and filing certain returns.

Even if not required for federal filings, an EIN may be useful/required for banking and state purposes. Practical guidance for US business owners/LLC founders: use an EIN for business PayPal accounts and business bank accounts; ensure the business name and TIN on PayPal match the IRS/W-9 details; respond promptly to PayPal’s Confirm Taxpayer Status requests; keep W-9 or W-8 documentation ready; for non-residents use appropriate W-8 forms or obtain ITIN where required; consult a tax advisor for complex situations and for state-level reporting nuances.

PayPal collects U.S. taxpayer identification numbers (TINs) — SSN, EIN, or ITIN — to meet IRS and state reporting obligations and will request TINs via account notifications and email when accounts approach reporting thresholds.

Sole proprietors and single-member LLCs that are disregarded entities should provide the owner’s TIN (typically SSN) unless the owner obtains and uses an EIN. PayPal’s 2025 guidance reflects the restored federal Form 1099-K reporting threshold: $20,000 AND 200 transactions (per federal law change in 2025).

PayPal also notes several states have lower thresholds (Vermont, Massachusetts, Virginia, Maryland: $600; Illinois: $1,000 with 4+ transactions) and will report per state requirements where applicable.

PayPal will also issue a Form 1099-K for any customer subject to backup withholding during the year regardless of gross payments. Failure to provide accurate TIN information can trigger account limitations, tax holds, or 24% backup withholding.

PayPal tells users to update their taxpayer status via the Confirm Taxpayer Status flow and to ensure the TIN matches IRS records. For businesses, an EIN is the federal tax ID issued by the IRS.

The IRS issues EINs free online (SS-4 application / EIN assistant). Typical reasons to obtain an EIN include: hiring employees, operating a partnership or corporation, paying certain federal taxes, opening business bank accounts, and filing certain returns.

Even if not required for federal filings, an EIN may be useful/required for banking and state purposes. Practical guidance for US business owners/LLC founders: use an EIN for business PayPal accounts and business bank accounts; ensure the business name and TIN on PayPal match the IRS/W-9 details; respond promptly to PayPal’s Confirm Taxpayer Status requests; keep W-9 or W-8 documentation ready; for non-residents use appropriate W-8 forms or obtain ITIN where required; consult a tax advisor for complex situations and for state-level reporting nuances.