Withholding Taxes - Tax ID

[trptplus]

I received an email saying to add my tax ID to avoid backup withholding but I'm not sure why I received this message. This wasn't payment for something I sold. The money was deposited to Paypal because I redeemed a cash back reward from my credit card company. Does this still apply? Thank you.

[sharpiemarker]

@trptplus 

Were you charged a goods and services fee to received that money?

If not, you’ll have to talk to PayPal about it. Nevertheless, they are collecting tax ID to comply with tax law anyway since the new $600 will be in effect for tax year 2023. If you’re not eligible, PayPal just won’t send a 1099 on your account to the IRS in the end.

[trptplus]

Thank you.

[Bajati]

I'm receiving money from friends and family. How do I contact Paypal

[PayPal_Bindu]

Hello @Bajati,

Thank you for contributing to the PayPal Community forum!

I am happy to help you with your inquiry here! All US payment processors, including PayPal, are required to provide information to the US Internal Revenue Service (IRS) about customers who receive payments for the sale of goods and services above the reporting threshold in a calendar year. This doesn’t include Friends and Family payments. More information on how PayPal report the income to IRS can be found in this article. You can find the PayPal contact options here. 

Best wishes,

Bindu