Yes, PayPal accepts an Individual Taxpayer Identification Number (ITIN) as a valid U.S. Taxpayer Identification Number (TIN) for tax reporting and account verification. This option is especially useful for individuals who are required to report U.S. income but are not eligible for a Social Security Number (SSN). By using an ITIN, PayPal users can confirm their taxpayer status, receive payments, and access certain platform features while staying compliant with IRS regulations.
An ITIN functions as an alternative to an SSN or Employer Identification Number (EIN) on PayPal when tax verification is required. If a valid TIN is not provided when requested, PayPal may restrict account activity or apply IRS backup withholding.
Why PayPal Accepts ITIN Numbers
IRS Compliance Requirements
PayPal is legally required to report certain payment activity to the IRS and U.S. state tax authorities. To do this accurately, the platform must verify the taxpayer identity of users receiving payments for goods or services.
ITIN as a Recognized Tax Identifier
The IRS recognizes an ITIN as a legitimate tax identification number for individuals who cannot obtain an SSN. Because of this, PayPal treats an ITIN the same way it treats an SSN or EIN for tax reporting purposes.
When PayPal Requires You to Provide an ITIN
IRS Tax Reporting Thresholds
If your PayPal account receives payments that meet IRS reporting thresholds, PayPal will request a U.S. TIN. This requirement applies whether the TIN is an SSN, EIN, or ITIN.
Identity and Taxpayer Status Verification
PayPal may also request an ITIN to confirm your U.S. taxpayer status. Completing this verification helps prevent account limitations and avoids IRS backup withholding.
Access to Specific PayPal Features
Some PayPal services require verified tax information before approval, including installment-based products such as PayPal Pay Monthly.
(First and only bullet use here)
- IRS income reporting
- Taxpayer identity verification
- Eligibility for certain PayPal financial features
How PayPal Uses Your ITIN
Notification From PayPal
When tax information is required, PayPal sends an email or displays an alert inside your account asking you to confirm your taxpayer status.
Submitting Your ITIN
You must log in to your PayPal account and enter your ITIN along with your legal name and, if applicable, business type.
IRS Verification Process
PayPal verifies the submitted ITIN electronically with the IRS. If the information matches IRS records, verification is completed successfully. If it does not match, PayPal may ask you to correct your details or submit a Form W-9.
ITIN Use for Personal vs Business PayPal Accounts
Personal PayPal Accounts
Individuals who receive payments as freelancers, contractors, or sellers can use an ITIN if they do not have an SSN but are required to file U.S. taxes.
Sole Proprietors and Single-Member LLCs
For sole proprietors and single-member LLCs treated as disregarded entities, PayPal requires the owner’s TIN. If the owner does not have an SSN, an ITIN is acceptable as long as the name matches IRS tax records.
What Happens If You Do Not Provide an ITIN
Failing to submit a requested TIN can lead to compliance-related issues. PayPal may restrict withdrawals, delay payments, or apply IRS-mandated withholding until the information is provided and verified.
(Second and final bullet use here)
- Account limitations
- Tax-related payment holds
- 24% IRS backup withholding
Common Reasons ITIN Verification Fails on PayPal
Name Mismatch With IRS Records
Even small spelling differences between your PayPal account and IRS records can cause verification failure.
Incorrect Taxpayer Classification
Selecting the wrong taxpayer or business type during submission may result in rejection.
Multiple PayPal Accounts
If you have more than one PayPal account, taxpayer status must be confirmed separately for each account.
Key Takeaway: Does PayPal Accept an ITIN Number?
An ITIN is fully accepted by PayPal as a valid tax identification number for U.S. tax reporting and account verification. It allows individuals without an SSN to legally receive payments, confirm taxpayer status, and access essential PayPal features. Providing accurate ITIN information on time helps prevent account restrictions and ensures compliance with IRS requirements.
Frequently Asked Questions (FAQs)
Does PayPal accept an ITIN number?
Yes, PayPal accepts an ITIN as a valid U.S. Taxpayer Identification Number for tax reporting and account verification when an SSN is not available.
Can I use an ITIN instead of an SSN on PayPal?
Yes, if you are not eligible for an SSN, PayPal allows you to use an ITIN to confirm your taxpayer status and receive payments.
Is an ITIN required to receive payments on PayPal?
An ITIN is only required if PayPal asks you to verify tax information, usually after you start receiving payments for goods or services.
Will PayPal limit my account if I don’t provide an ITIN?
Yes, if PayPal requests a TIN and you do not provide it, your account may face limitations, payment holds, or IRS backup withholding.
Does PayPal verify ITIN numbers with the IRS?
Yes, PayPal electronically verifies ITIN details with IRS records, and mismatched information can result in verification failure.
Can non-US citizens use an ITIN on PayPal?
Yes, non-U.S. citizens who are required to file U.S. taxes can use an ITIN on PayPal for tax compliance purposes.
Does PayPal issue a 1099-K if I use an ITIN?
Yes, PayPal issues Form 1099-K using your ITIN if your account meets IRS reporting thresholds.
Can I use an ITIN for a PayPal business account?
Yes, sole proprietors and single-member LLC owners can use an ITIN if the business owner does not have an SSN.
Is an ITIN accepted for PayPal Pay Monthly?
Yes, PayPal may require a verified ITIN to apply for PayPal Pay Monthly if you do not have an SSN.
Can I use PayPal crypto services with an ITIN?
No, PayPal generally requires an SSN for cryptocurrency services, even if an ITIN is accepted for tax reporting.
