Is an EIN a TIN, and Why Do I Need One?
Anyone living and working in the U.S. needs an identification number to pay income taxes and obtain benefits. There are many different forms of identification, and they are all for specific purposes. Some apply to individuals and others apply to business entities. The key is knowing what each type is and obtaining the correct number(s) you need to file taxes and apply for benefits. As a rule, you should know what is a TIN number (tax ID number).
What is a TIN?
A Taxpayer Identification Number (TIN) is a number used by the Internal Revenue Service (IRS) to identify you. It may be issued by the Social Security Administration (SSA) or the IRS. The SSA issues Social Security numbers (SSNs), and the IRS issues other types of identifiers like EINs. Some types of TINs include:
- Social Security Number (SSN)
- Employer Identification Number (EIN)
- Individual Taxpayer Identification Number (ITIN)
- Taxpayer Identification Number for Pending U.S. Adoptions (ATIN)
- Preparer Taxpayer Identification Number (PTIN)
Difference Between a TIN and an EIN
A TIN is an umbrella term encompassing many different types of taxpayer identifiers. An EIN is simply one type of TIN used for business. The primary difference between a TIN and an EIN is that individuals use a TIN for filing taxes and other things, whereas an EIN is used for filing business taxes.
You can use an EIN to open business bank accounts, apply for business loans, and file business taxes, including payroll taxes. As an individual, you need to use your TIN to file personal taxes. This is your SSN, if you have one, or your ITIN, if you're a non-US resident or nonresident who isn't eligible for an SSN.
Who Needs an ITIN?
Individuals who do not have U.S. citizenship or are unable to obtain a Social Security number (SSN) must apply for an ITIN to file taxes. If you live abroad but do business in the U.S., you also need an ITIN for various purposes. Anyone who falls within the categories below needs an ITIN:
- A non-resident alien who needs to pay taxes.
- A resident alien who needs to pay taxes.
- Non-resident who claims tax benefits.
- Dependent or spouse of a non-resident visa holder.
How to Apply for an ITIN
ITINs are unique identifiers for individuals who cannot obtain a Social Security number, including resident aliens, nonresident aliens, and others. You can obtain one through the IRS. Their website has detailed information about how to apply for and get an ITIN. The steps are as follows:
After you apply for your ITIN, wait 7 weeks, and the IRS will notify you about the status of your application. During tax season (January 15th through April 30th), you may have to wait 9-11 weeks. If you still haven’t heard after that, you can contact the IRS to follow up. The IRS will return your supporting documents to you within 60 days after processing your application.
Some of the notices you may receive from the IRS include:
- Gather Documentation: You will need a completed Form W-7, a U.S. Federal Income Tax Return, and other supporting documents proving you are a U.S. resident or dependent of one.
- Apply by Mail: You can send in your application and support documents by mail to: Internal Revenue Service, Austin Service Center, ITIN Operation, P.O. Box 149342, Austin, TX 78714-9342.
- Apply in Person: If you prefer, you can apply in person at one of the following types of locations:
- IRS Taxpayer Assistance Center with ITIN services.
- Volunteer Income Tax Assistance (VITA) site with ITIN services.
- Certifying Acceptance Agent or Acceptance Agent.
- CP565 Notice – The IRS assigned you an ITIN. You don’t need to take further action.
- CP566 Notice – The IRS needs more information to process your ITIN application.
- CP567 Notice – Your ITIN application was rejected. You must resubmit it.
What is an EIN?
An Employer Identification Number (EIN), or Federal Employer Identification Number (FEIN), is a nine-digit number the IRS assigns to your business for tax and other purposes. Your EIN identifies you to the IRS when filing different types of taxes (payroll, income, etc.). Employers, sole proprietors (with employees), corporations, LLCs, partnerships, nonprofits, trusts, estates, government agencies, certain individuals, and others all use EINs. Whenever you contact the IRS, you use your EIN to identify your business, so the correspondence and information are linked to the proper account.
Who Needs an EIN?
Most business types require an EIN. Regardless of whether you structure your company as a sole proprietorship, partnership, limited liability company (LLC), corporation, or nonprofit, you need to apply for and obtain an EIN or FEIN.
There are some exceptions to this rule. Some sole proprietorships and single-member LLCs can do business without an EIN. In these cases, the individual owner will use their Social Security number (SSN) instead when filing taxes and identifying themselves to clients for tax purposes. As long as you don’t hire employees as a sole proprietorship or single-member LLC and comply with other rules, you don’t need an EIN. However, even if these entities don’t need an EIN, obtaining one makes sense, as it offers many benefits.
How to Obtain an EIN
Since most business structures do require an EIN, you should apply for one after registering your company with the Secretary of State. Obtaining an EIN is a relatively simple process. Additionally, applying for an EIN is free; no fees are required.
Obtaining an EIN is easy, and you can use two methods to do so. They are as follows:
The online application option is by far the fastest way to get your EIN. Fax is the second quickest option, and if you apply by mail, you may have to wait up to four weeks to receive your confirmation letter with your EIN.
- By Mail
Visit the IRS website and download Form SS-4 and print it out. Complete the form with all the information required (see below). Alternatively, you can mail the form to the IRS using the address printed on the form. You may have to wait a bit longer for your EIN to arrive by mail.
- Online Application
You may also choose to submit your application to the IRS digitally. Visit the IRS website and fill out all the fields. Once you have completed and submitted the online application, you will immediately receive your new EIN after the IRS validates the information. Validation takes place during the application process. Once complete, you can download and print your confirmation letter, which includes your EIN.
- By Fax
Visit the IRS website and download form Form SS-4 print it out, and complete it with all the necessary information (see below). Fax your completed form to the number listed on there. If you use fax, the IRS will fax you back a confirmation letter with your new EIN within four business days.
What Information is Required for an EIN?
When applying for an EIN/FEIN, you must provide the IRS with detailed and specific information about yourself and your business. Those details are as follows:
Along with the information above, you must also identify your business type from the list of industries below. Use your best guess if nothing matches up perfectly.
- The legal name of your business. If you have registered the sole proprietorship under your name, then you will use that. If you have a trade name, “Doing Business As (DBA)” name, you must include that as well.
- Your business’s legal address, including state and country.
- Your name and tax ID (SSN). As a sole proprietorship, you will have the authority to control and manage the business, funds, and all assets.
- The type of entity (corporation, LLC, sole proprietorship, partnership) and the date you started the business.
- Does your business involve gambling, and do you sell alcohol, tobacco, or firearms?
- You must provide the reason you are applying for an EIN. Examples include acquiring an existing business, starting a new one, or hiring employees.
- The highest number of employees you expect to hire within the next 12 months. You must also designate when you will pay employment taxes (annually or quarterly) and the first date you paid wages to your staff.
- Accommodation & food service
- Construction
- Manufacturing
- Finance & Insurance
- Healthcare & social assistance
- Retail
- Real estate
- Rental & leasing
- Transportation & warehousing
- Wholesale-agent/broker or Wholesale-other
- Other
FAQs
The purpose of a TIN is to identify you to the IRS and SSA as an individual or business entity for tax purposes. Other government offices also use your ID number to look things up. For example, when police detain you, they will enter your license number into the DMV databases to find out where you live and other details about you.
You need a TIN to identify yourself when filing tax returns, paying taxes, and other activities. TINS and EINs are used by sole proprietors, corporations, LLCs, partnerships, nonprofit organizations, trusts, estates, government agencies, individuals, and businesses.
Yes, all entities (businesses and people) who engage in work in the U.S. do need to have a TIN. They are also necessary for filing VAT returns, claiming tax refunds, or filing other types of tax-related documentation.
An SSN and an ITIN are both types of Taxpayer Identification Numbers; they fall under the same category. When filing individual tax returns, a person will use their Social Security number or ITIN (Individual Taxpayer Identification Number). ITINs are most often used by an international person working in the U.S. who needs to file taxes or exemptions for tax withholding.
An individual who operates outside the U.S. but conducts business within the U.S. or works in the country would require an ITIN (Individual Taxpayer Identification Number). An ITIN is for tax processing purposes only and works for resident aliens, non-residents, their spouses, and dependents who cannot get an SSN. An ITIN is a 9-digit number, beginning with the number "9", formatted like an SSN (NNN-NN-NNNN).
Getting an ITIN is not quick. You must allow at least seven weeks before you hear back. If it is during tax time, it may take up to 11 weeks before you get your ITIN after completing your application.
You can find your TIN on many official documents, including your tax returns, any forms you filed with the IRS, and possibly with the Social Security Administration if you are looking for your Social Security number.
A TIN is a unique 9-to 12-digit code. Each number signifies something. For example, with the TIN of 000-123-456-001, the first digit zero indicates the TIN is for a corporation. The rest of the numbers are the actual TIN.
If you are looking at an individual’s TIN, it would be their SSN. For business entities, you would look at their Employer Identification Number (EIN) assigned by the Internal Revenue Service (IRS).
Yes. W-9s are filled out by individuals who work as independent contractors for clients. They may use their Social Security number or Employer Identification Number (EIN), depending on the type of business entity. Sole proprietors may use either, but will most often use their SSN.
No. A TIN is an umbrella term encompassing many different types of ID numbers. An EIN is a specific type of identifier used by businesses. They are issued by the IRS and assigned to companies, trusts, estates, and other types of entities for tax purposes.