Whether you’re establishing a new business in the US, managing payroll, or filing tax documents, you’ve likely encountered the terms Employer Identification Number (EIN) and Tax Identification Number (TIN). These terms are interrelated but have distinct applications. Understanding these distinctions is important for managing your business’s finances, legal standing, and tax obligations.

Below, we explain what EINs and TINs are, when to use them, and common mistakes that can lead to delays or compliance issues.

What’s in this article?

• What is an EIN, and what is a TIN?
  
• How are EIN, SSN, and ITIN related to TIN?
  
• When should businesses use an EIN vs. another TIN?
  
• How to apply for an EIN or TIN
  
• What are the legal implications of using the wrong number?
  
• How to correct errors in EIN or TIN applications
  

What is an EIN, and what is a TIN?

An EIN is a unique, nine-digit number assigned by the US Internal Revenue Service (IRS) to businesses and other entities for tax purposes. Its primary use is to identify employers who have employees, but it’s also required for other entities such as partnerships, corporations, and non-profits. Think of it as a Social Security Number (SSN) for businesses – it’s how the IRS tracks a business’s tax obligations. Businesses also use an EIN to manage payroll for employees and handle other business-specific tax matters.

A TIN is a broader term encompassing several types of identification numbers the IRS uses to track individuals and entities for tax purposes. SSNs, EINs, and Individual Taxpayer Identification Numbers (ITINs) are all types of TINs.

EINs and TINs differ in their scope and primary usage. A TIN is a general term that includes various types of numbers the IRS uses to track taxpayers. An EIN is a specific type of TIN issued exclusively to businesses, trusts, estates, and other entities.

How are EIN, SSN, and ITIN related to TIN?

EINs, SSNs, and ITINs are different types of TINs the IRS issues to track tax obligations. Here’s how they’re related:

EIN

EINs are for businesses and entities rather than individuals. The IRS issues them to businesses, organisations, trusts, and estates for tax identification purposes. They’re required for any business that has employees, operates as a corporation or partnership, or files employment, excise, or alcohol, tobacco, and firearms tax returns.

SSN

SSNs are the most common type of TIN for individuals. The IRS assigns them to US citizens and certain eligible residents, usually to track Social Security benefits. They also function as TINs for individual tax filings.

ITIN

ITINs are for individuals who cannot obtain SSNs. The IRS issues them to individuals who are required to pay taxes but aren’t eligible for SSNs. These include certain non-US residents, all non-US non-residents, and their dependents.

When should businesses use an EIN vs. another TIN?

Whether to use an EIN or a different type of TIN depends on your specific tax situation. Your business is legally required to have an EIN if:

• You have employees.

• You operate as a partnership or corporation.

• Your business files employment, excise, or certain other tax returns (e.g., alcohol, firearms).

• You’re a non-profit or trust.

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 non-resident who isn’t eligible for an SSN.

How to apply for an EIN or TIN

Here’s a quick guide to applying for an EIN or a TIN based on your needs:

EIN

The fastest way to apply for an EIN is through the EIN Assistant on the IRS website. However, this is available only if your principal business is located in the US or its territories. Once you complete the application, you receive your EIN immediately. You can also post or fax a completed Form SS-4 to apply. Processing by post can take up to four weeks, while it can take up to four business days if you apply by fax. International applicants can apply by calling the IRS at its international line.

TIN

If you need an SSN, apply through the Social Security Administration (SSA) by filling out Form SS-5. You can submit the application in person at your local SSA office or by post. You need to provide documentation proving your identity, age, and US citizenship or lawful immigration status.

If you need an ITIN, download Form W-7 from the IRS website. You can submit the application by post to the listed IRS address or in person to an IRS-authorised certifying acceptance agent or IRS Taxpayer Assistance Center. You need to provide supporting documents – such as a passport or other government-issued ID – that prove your foreign status and identity. Processing ITIN applications typically takes seven weeks. Afterward, you receive your ITIN by post.

What are the legal implications of using the wrong number?

Using the wrong number – whether it’s an EIN, SSN, or ITIN – can cause several issues. Filing taxes with the wrong TIN can lead to rejected tax filings, delayed tax refunds, or fines from the IRS. If you file taxes with someone else’s TIN, the IRS might log your tax filing as missing and issue a late fee. This can create confusion with IRS records, and you might not be credited for the taxes you’ve already paid. Your income could be tied to someone else’s TIN, which creates issues for you and the entity whose TIN you’ve used.

Repeated errors with TINs can increase IRS scrutiny and the risk of an audit. When you file business documents – such as contracts and payroll filings – using the wrong TIN puts you at risk of non-compliance with tax laws and state regulations. This can even cause a breach of contract (e.g., if you were required to list an EIN on the contract but accidentally listed your personal TIN instead).

How to correct errors in EIN or TIN applications

Mistakes happen. If you’ve realised there’s an error in your EIN or TIN application, it’s important to correct it as soon as possible to avoid bigger problems later.

Here’s how to fix errors for each type of TIN:

Correcting an EIN application

• Call the IRS: If you notice a mistake after applying for an EIN, call the IRS Business and Specialty Tax Line at 1-800-829-4933. Explain the error, and the IRS might be able to fix it quickly over the phone.

• Send a correction letter: If you can’t fix it over the phone, write a letter to the IRS. Send the letter to the appropriate IRS office, according to where your business operates. It can take a few weeks for the IRS to process your correction. In the letter, include:

  • Your business name, as it appears on the EIN application
    
  • Your TIN, if applicable
    
  • Your contact information
    
  • The mistake that needs to be corrected
    

• Update incorrect business details: If you’ve applied for an EIN and need to update information – such as your business name or address – file Form 8822-B to correct these details.

Correcting a TIN application

SSN application

• Contact the SSA: If there’s an error with your SSN application, you need to contact the SSA directly. You might need to fill out Form SS-5 to update or correct your information. When correcting an SSN error, be prepared to provide documents that prove your identity, such as a passport or birth certificate.
  

ITIN application

• Submit a corrected Form W-7: If your ITIN application has errors, you need to complete a new Form W-7 with the correct information. Include the required documents to verify your identity, such as your passport or other government-issued ID. Mail the updated Form W-7 and supporting documents to the IRS here:
  

Internal Revenue Service
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

• Request a reissue: If your ITIN contains a mistake, such as an incorrect name or date of birth, you also need to submit an updated Form W-7. The IRS will issue a corrected ITIN after this form is processed.