Starting an eBay business has a lot of looking questions regarding compliance and regulation. One of them is: Why does eBay need my SSN?
eBay asks US sellers for a taxpayer ID once they reach their first sale, not when they sign up and not at a set sales figure. You can give a Social Security number (SSN), an Individual Taxpayer Identification Number (ITIN), or an Employer Identification Number (EIN).
This applies to sellers, not to buyers. If you only ever buy on eBay, you will not be asked for a taxpayer ID.
Take time to learn how it will affect your eBay account, and if you must provide this confidential information in creating your eBay account.
I understand your concern about this new eBay requirement: you are wary that you are providing eBay with sensitive information. It’s a legitimate concern given the prevalence of cybersecurity risks.
However, it is not something eBay implements by choice or to annoy eBay sellers. It’s mandated by federal legislation!
These steps are part of eBay’s measures to remain compliant with the IRS and avoid limiting your account’s ability to sell on eBay. At the same time, successful sellers don’t just stop at compliance; they also use eBay product research tools to stay ahead of the competition and keep their business growing.
If you’re curious if you can still sell on eBay even without providing your social security number, keep reading. You’ll find the information you need about setting up your business on eBay and what other sensitive information is required!
What is a Social Security Number (SSN)?
A Social Security number in the US is a numerical identifier for tracking taxable income and determining qualified benefits. The issuance of SSNs started in 1936; today, it is issued by the Social Security Administration.
All US citizens and permanent residents (even temporary working residents) must have a Social Security number. Even non-working residents must be issued one. It uses a random stream of digits and contains nine digits.
Why Does eBay Require a Social Security Number for Selling?
As mentioned, there are numerous reasons why eBay requires social security numbers from sellers.
The new requirement came after eBay parted ways with PayPal as its payment processor. Since then, eBay has been obliged by federal legislation in the United States to require eBay account holders to submit their Social Security numbers and tax information.
The IRS requires the information to ensure compliance with federal legislation on taxation.
Before PayPal and eBay parted ways, the former was responsible for processing payments within the ecommerce platform. If you were using PayPal to process payments, you submit your tax information to PayPal, not eBay.
eBay’s operating agreement with PayPal, which governed how quickly eBay could take over payment processing, expired in July 2020. eBay then scaled its own managed payments system and completed the rollout in 2022.
And since the payments are processed within the eBay platform, account holders will now provide their sensitive information, such as SSN and tax information, to the platform.
Needless to say, this new requirement and change rule on eBay is part of IRS and tax compliance measures. The IRS and federal law require eBay to report sales transactions within a particular threshold amount for tax compliance purposes.
When does eBay file a 1099-K about you?
Giving eBay your taxpayer ID is separate from eBay reporting your sales to the IRS. eBay and other online marketplaces file a Form 1099-K when your payments for goods or services pass more than $20,000 in more than 200 transactions in a calendar year. That threshold decides whether a form is filed. It does not decide whether your income is taxable. The IRS is explicit that no matter the amount reported, if you receive payments for selling goods or services you must report all income on your tax return.
Who is Required to Provide Their Social Security Number to eBay?
If you have an eBay account but use it mainly to buy goods and services, you should not worry about providing your social security number and tax information to the platform.
Only sellers must submit the said information for their account to remain valid and to continue selling items on eBay.
eBay asks US sellers for a taxpayer ID once they reach their first sale, not at a set sales figure. Not all sellers have a Social Security number. In that case you can provide an ITIN or an EIN instead.
The ITIN refers to the Individual Tax Identification Number. You can use this information instead of a Social Security number.
If not available, you can also use the EIN or Employer Identification Number. It is recommended for any eBay seller who owns a small business. You can register online for free if you don’t have an EIN yet.
You can submit the EIN instead of your personal SSN to eBay.
There are differing requirements when adding your tax details to your account, depending on your eBay seller account type. For private sellers, here is the information that you must submit to your account:
- Name & Address
- Birthdate
- Social security number
- Bank account
- Photo ID
If you are a business seller on eBay, you must provide the following information:
- Business name & address
- Employer ID Number (EIN)
- Business bank account
- Beneficial owner information
Can You Sell on eBay Without an SSN?
Now that you know why eBay requires sellers to provide their SSNs, you might be curious if you can still sell on eBay without one. eBay asks for a taxpayer ID once you reach your first sale, so there is no sales figure below which a US seller is exempt. If you do not provide one, eBay puts your payouts on hold, may restrict your ability to list and sell, and deducts backup withholding from your payments.
If you don’t, you will not be required to provide this information when selling items on eBay.
If you have reached the minimum threshold and have not updated your tax information in your eBay account, eBay will put your payouts on hold. In other words, you cannot withdraw your hard-earned sales to your bank account until you provide the required information.
You have a choice to provide your sensitive information or not, but you don’t have a choice when it comes to accessing the earnings in your account.
There is also the risk that your eBay account could get suspended if you refuse to provide your SSN even after putting your earnings on hold.
If you want to continue using eBay as a platform for online selling, you must comply with the rules and provide the information they require on your account.
For accounts that receive a notification from eBay to update their account information, you must update said information within the stated deadline. Otherwise, your eBay payouts will be put on hold, and you cannot withdraw them to your bank account.
How to Tell if You Must Provide Your SSN
Are you not sure if your eBay seller account is qualified to require you to provide your SSN?
If you sell on eBay in the US, you will be asked for a taxpayer ID once you make your first sale. eBay asks you for it directly once you reach that point, so there is no sales threshold to watch for. In practice every US seller is asked at some point.
Steps to Adding Your SSN on eBay
If your account is among those that eBay requires to be updated with tax information, here are the steps to complete updating your account.
Step 1: Obtain a copy of your SSN.
You can scan your Social Security card with the details eBay requires for updating your account. Or you can upload other documents that contain your social security information, such as the letter that the IRS sent containing your SSN details.
If none of the above are available, you have other alternatives, such as your tax document, W2 from your employer, or 1099 form.
Step 2: Apply for a lost Social Security card.
If you cannot get hold of your social security card or your number from any of the above documents, you can apply for a card replacement.
Visit your nearby Social Security Office to file this request and obtain your Social Security number.
Step 3: Update your eBay account.
Once you have your social security information, you can go to your eBay account and update the required information. Save any changes to resume selling on eBay and lift any holds on your payouts.
You will receive an email notification from eBay informing you that you have successfully updated your account information. If you’ve supplied all the required information, you will receive a notification that your payouts are available for withdrawal.
It means that you can resume selling on eBay as usual.
Download this eBook now and learn how to sell on eBay like a pro.What About eBay Sellers Outside the US?
The requirement to update tax information and provide social security information to eBay is only required for US sellers since it complies with US federal law.
Therefore, sellers outside the US are not required to provide this information or the need to verify their personal information.
Sellers must know when to add (or not) their personal information, especially with the increased risk of cyber crimes.
However, eBay has invested millions to boost its technical and security infrastructure to provide its eBay users with peace of mind when providing their sensitive information in using their website.
Final Words on Why Does eBay Need My SSN
Many eBay sellers complain about the new requirement to provide sensitive information to continue selling on this platform. However, this rule change does not apply to eBay alone. It is implemented across all ecommerce platforms, like Etsy.
All sellers on any platform must provide their tax and social security numbers to ensure tax and federal compliance.
If eBay and online selling is your primary income source, you need not think twice about complying with these regulations. According to eBay, verifying your information also helps to make eBay a trusted marketplace.
These steps are part of eBay’s measures to remain compliant with the IRS and avoid limiting your account’s ability to sell on eBay.
Serious About Selling on eBay?
If eBay is asking for your SSN, it is because you have started selling. Use the eBay Competitor Research Tool to study other top eBay sellers, see what is working for them, and plan your next profitable move. Stay compliant and competitive.
This article is general information, not tax or legal advice. Tax rules change and some states set their own reporting thresholds. Confirm the current federal threshold at IRS.gov and speak to a qualified tax professional about your own situation.
Frequently Asked Questions on Why Does eBay Need My SSN
Here are some frequently asked questions about eBay requiring you to provide your SSN when selling
Is it safe to give your SSN to eBay?
Yes, it’s generally safe. eBay requires your SSN for identity verification and tax reporting under U.S. regulations. The platform uses encryption to protect sensitive data. However, always enter details only through official eBay pages and never through suspicious links or emails.
Can I sell on eBay without an SSN?
In the U.S., you generally cannot. eBay requires a Social Security Number or an EIN to verify identity and comply with IRS tax reporting rules. Without it, your payouts cannot be processed, and selling privileges may be restricted or suspended.
Is it normal for eBay to ask for my SSN?
Yes, it’s normal. eBay must collect SSNs or EINs from U.S. sellers to comply with federal tax laws and verify identity. This ensures accurate IRS 1099-K reporting. Requests should only be entered on secure, official eBay account settings pages.
What are the risks of providing my SSN?
The main risks are identity theft and fraud if your SSN is exposed through phishing, hacking, or misuse. Criminals could open credit accounts or file false tax returns in your name. Always submit your SSN only through secure, official platforms.
Do I have to verify my identity to sell on eBay?
Yes. eBay requires all sellers to verify identification before payouts can be processed. This involves providing personal details such as name, address, bank account, and in the U.S., a Social Security Number or EIN for tax reporting compliance.