A tax ID number (TIN) is a unique number that tax authorities issue to individuals and businesses to track tax responsibilities. In the United States, the most common types of TINs are the Social Security number (SSN) for individuals and the Employer Identification Number (EIN) for businesses. These numbers are required to file taxes, claim benefits, or complete transactions that involve tax reporting.

Businesses need TINs to stay compliant with tax regulations and complete tasks such as opening business bank accounts, hiring employees, and applying for business licences. The US Internal Revenue Service (IRS) and other agencies use your TIN to identify your business and track compliance with financial reporting requirements and tax obligations.

Below, we’ll explain the different types of TINs, how to determine which kind you need, and how to apply for it.

What’s in this article?

• Types of tax ID numbers
  
• Why do you need a tax ID number?
  
• Determining the right tax ID number for you
  
• How to apply for an EIN
  
• How to obtain an ITIN
  

Types of tax ID numbers

Here are the most common types of TINs and what businesses should understand about each.

SSN

An SSN is issued by the Social Security Administration (SSA). It’s primarily used for individual citizens and some residents. If they don’t have TINs, owners of some business types (e.g. sole proprietors, single-member limited liability companies [LLCs]) must use their SSNs to file taxes and certain information returns (e.g. 1099 forms). This can, however, increase the business owner’s risk of identity theft, because the SSN is being used more often. Many small business owners choose to use an EIN to avoid giving out their SSNs to clients and other members of the public.

EIN

An EIN is a nine-digit federal TIN issued by the IRS. Businesses use EINs on their tax returns, to issue 1099 forms, and to apply for business licences. EINs are required for all businesses that:

• Operate as a corporation or partnership, including multi-member LLCs

• Hire employees, as an EIN is required to handle employment taxes

• File excise or alcohol, tobacco, and firearms tax returns

Individual Taxpayer Identification Number (ITIN)

An ITIN is issued by the IRS to individuals who need a TIN but are not eligible for an SSN. It’s typically used by non-US residents and non-residents. An ITIN does not grant work authorisation or Social Security benefits and is strictly for tax filing purposes. Foreign business owners or investors might use an ITIN if they don’t qualify for an SSN and need to file US taxes. Similarly, businesses that hire foreign independent contractors who are not eligible for SSNs might need to use those contractors’ ITINs to report payments.

Preparer tax identification number (PTIN)

A PTIN is used by tax preparers and accountants who prepare or assist in preparing federal tax returns for compensation. Any tax professional who prepares or helps to prepare federal tax returns for pay must obtain a PTIN and renew their PTIN annually. This applies to certified public accountants (CPAs) and other tax professionals. If your business relies on the services of a tax preparer, you can check their PTIN to ensure they are authorised to file federal tax returns on your behalf.

Why do you need a tax ID number?

Although businesses primarily use TINs to file taxes, they also have other uses. Here’s why your business needs one.

Filing and reporting taxes

A TIN is how tax authorities track your business’s tax filings. Without it, your returns can’t be processed. Filing taxes under an EIN instead of an SSN creates a legal separation between business and personal taxes.

Managing payroll and hiring

If you’re hiring employees, you need an EIN to report wages, handle employment taxes, issue W-2s, make payroll tax deposits, and comply with federal tax requirements such as Social Security and Medicare.

Opening business bank accounts

Banks typically won’t let you open a business account without a TIN – usually an EIN. This is important for separating business and personal finances and maintaining legal protections for LLCs or corporations. A dedicated business account can also simplify tracking and reporting for both financial management and tax purposes.

Accessing business credit and loans

Whether you’re applying for a loan or securing a business line of credit, you’ll need an EIN. This allows lenders to verify your business’s financial history and establishes your business’s credit profile. It also keeps your personal credit and business credit separate, which is especially important if you’re planning on scaling up or taking on major financial commitments.

Handling 1099 forms

If you work with independent contractors, you need their TINs (often SSNs or EINs) as well as your own TIN to issue 1099s. If you receive 1099 payments, you need a TIN to report those earnings to the IRS.

Establishing legal and financial identity

An EIN gives your business its own legal and financial identity. This is particularly important for LLCs, corporations, and partnerships, where personal and business liabilities need to remain separate. This distinction helps protect your personal assets.

Getting business licences and permits

Many states and local governments require an EIN before issuing business licences and permits, especially in regulated industries such as construction, retail, and food service.

Avoiding penalties

Whether you’re filing taxes, reporting contractor payments, or applying for licenses, you need the right TIN. Incorrect or missing TINs can lead to delays, increased scrutiny, and financial penalties.

Determining the right tax ID number for you

Choosing the right TIN depends on the nature of your business, how it’s structured, and what your growth plans are. Here’s what you should know.

Sole proprietors

If you’re running a solo business without any employees, you can use your SSN as your tax ID. But some sole proprietors choose to get an EIN anyway for privacy reasons. Using your SSN means you’ll have to share it more than you normally would, which can raise privacy and security concerns.

As a sole proprietor, you should get an EIN if:

• You want to keep your personal SSN more private

• Your business grows to the point of hiring employees

Single-member LLCs

Single-member LLCs that have not elected to be treated as corporations are treated as “disregarded entities” for tax purposes. This means they can file business taxes using the member’s SSN. Some single-member LLCs choose to get an EIN regardless, either due to privacy concerns or to open a business bank account or apply for business credit.

As a single-member LLC, you should get an EIN if:

• You plan to separate your personal and business finances

• You want to build business credit

• You plan to hire employees later on

Multimember LLCs and partnerships

Multimember LLCs and partnerships must get an EIN for tax reporting. This EIN is used to file information returns and issue Schedule K-1s to partners. If your LLC has multiple owners or is structured as a partnership, you need an EIN.

Corporations

Corporations must have an EIN to file corporate tax returns, issue stock, and handle employment taxes, if the corporation has employees. If you’ve incorporated your business, you need an EIN – regardless of the business’s size.

Non-US residents and foreign-owned businesses

If you’re a non-resident or foreign national who owns a US-based business, you still need a TIN. In these cases, you’ll need to apply for an ITIN or an EIN to comply with IRS reporting requirements.

If you’re a foreign national who doesn’t qualify for an SSN but still needs to pay US income taxes, you need an ITIN. If you’re a foreign national who owns a US-based business that requires an EIN, such as a corporation or partnership, you need an EIN.

Businesses with employees

All businesses with employees need an EIN to report payroll taxes, file W-2s, and comply with federal and state employment laws.

Independent contractors

If you’re working as an independent contractor or freelancer and don’t have employees, you can still use your SSN to file taxes. If you’re a contractor who wants an extra layer of privacy for tax reporting purposes, you can get an EIN.

How to apply for an EIN

Applying for an EIN is a straightforward process, and there are a few different ways to do so. Here’s how it works.

Determine if you need an EIN

Before applying, ensure you need an EIN. Generally, you’ll need one if:

• You have employees

• You operate as a corporation or partnership

• Your business files tax returns for employment, excise, or alcohol, tobacco, and firearms

• You withhold taxes on income (other than wages) paid to a non-US non-resident

• You have a tax-deferred retirement plan formerly known as a Keogh plan

• You’re involved with certain organisations such as estates, trusts, and non-profits

Gather required information

Before applying, ensure you have the following information ready:

• Legal name of the business owner or entity: If you’re applying as a sole proprietor, this is your own name. If it’s for an LLC, corporation, or partnership, use the legal business name.

• Trade name: If your business operates under a different name than the legal one (a DBA or “doing business as” name), you’ll need to include that as well.

• Responsible party’s SSN or ITIN: This is typically the individual who controls the business (often the business owner). Their personal SSN or ITIN is required for the application.

• Business address: The principal address where the business operates.

Choose your application method

Online

You can apply for an EIN online directly through the IRS website if your principal business is located in the US or its territories. This is the fastest method and gives you an EIN immediately after completing the application. To apply online, follow these steps:

• Go to the IRS EIN online application page.

• Follow the instructions and answer the questions about your business structure, your reason for applying, and any necessary personal and business details.

Once you submit the application, you’ll receive your EIN instantly. The online service is available Monday through Friday from 7 am–10 pm ET.

By post

You can also apply for an EIN by posting a Form SS-4. To apply by post, follow these steps:

• Download and complete Form SS-4.

• Post the form to the IRS. If your principal business is located in one of the 50 states or the District of Columbia, you post it here:

  Internal Revenue Service
  Attn: EIN Operation
  Cincinnati, OH 45999

Processing time is about four weeks, so this can be a good option if you don’t need the EIN urgently.

By fax

If you prefer to fax your application, this is another option that takes about four business days to process. To apply by fax, follow these steps:

• Download and complete Form SS-4.

• Fax it to the appropriate number. If your principal business is located in one of the 50 states or the District of Columbia, you fax it here: (855) 641-6935.

You’ll typically get your EIN back via fax within four business days.

By phone (for international applicants)

If you’re applying for an EIN from outside the US, you can apply by phone. To apply by phone, follow these steps:

• Complete Form SS-4 and have the information ready.

• Call the IRS on (267) 941-1099 (not a free number). The office is open Monday through Friday from 6 am–11 pm ET.

You’ll typically receive your EIN at the end of the call.

Wait for confirmation

If you applied by post or fax, you’ll need to wait four weeks or four business days, respectively, to receive your EIN. Once you receive the EIN, it’s effective immediately and you can start using it for activities such as opening business accounts, hiring employees, and filing tax returns.

Keep your EIN safe

Once you get your EIN, keep it somewhere secure. The IRS will not issue a replacement EIN, so if it’s lost, you’ll need to contact the IRS to retrieve it.

Make changes as necessary

If there are changes to your business such as switching from a sole proprietorship to an LLC, changing ownership, or restructuring, you might need to apply for a new EIN. In other cases (such as changing your business address), you can update your existing EIN information with the IRS rather than apply for a new one.

How to obtain an ITIN

Individuals who aren’t eligible for an SSN but need to comply with US tax laws must obtain an ITIN. This includes non-US residents and non-residents, foreign investors, and other individuals who have to file US tax returns. Here’s a step-by-step guide to applying for an ITIN.

Determine if you need an ITIN

An ITIN is required if:

• You are a non-US non-resident who has to file a US tax return

• You are a non-US resident who has to file a US tax return

• You are a dependent or spouse of a US citizen, non-US resident, or non-resident visa holder

• You are a non-US non-resident who needs to claim a tax treaty benefit

• You are a non-US non-resident student, professor, or researcher filing a US tax return or claiming an exception

If you are eligible for an SSN, you cannot apply for an ITIN. You must apply for an SSN through the SSA.

Gather the necessary documents

To apply for an ITIN, you’ll need to submit the following documents:

• Completed application form: Form W-7 is the ITIN application form. You’ll provide basic information including your name, country of citizenship, US visa (if applicable), and reason for applying for the ITIN.

• Valid federal tax return: Unless you qualify for an exception, you’ll need to attach a valid federal income tax return to your Form W-7.

• Original supporting documents or certified copies: You’ll need to submit original documents or certified copies from the issuing agency. Acceptable documents include the following:

  • Passport (this can serve as both your proof of identity and foreign status)
    
  • National ID card (this must show photo, name, address, date of birth, and expiration date)
    
  • US visa, foreign voter’s registration card, or other immigration documents, if applicable
    
  • Birth certificate, if you’re applying for a child who will be claimed as a dependent on a tax return
    

You’ll need to submit original documents (such as a passport) or copies certified by the issuing agency. Photocopies that are not certified won’t be accepted. You might be able to request a certified copy of documents at an embassy or consulate if you’re not in the US.

Complete Form W-7

Form W-7 is your formal application for an ITIN. Here’s how to complete it:

1. Provide personal information such as your name, address, and country of citizenship.

2. Indicate your reason for applying for an ITIN (e.g. filing a tax return, claiming tax treaty benefits).

3. Enter any additional information related to dependents, if applicable.

4. Sign and date the form before submission.

Submit your application

By post

You can post the completed Form W-7, along with your federal tax return and supporting documents, here:

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

You will usually receive a letter from the IRS assigning your ITIN within seven weeks.

In person

You can apply for an ITIN in person through an IRS Taxpayer Assistance Center or an IRS-authorised Acceptance Agent or Certifying Acceptance Agent (CAA). These agents can verify your documents so you won’t have to post originals, which can be helpful if you don’t want to send your passport or other important documents through the post.

Use the IRS locator to find a Taxpayer Assistance Center near you. Alternatively, you can find a CAA through the IRS website.

Wait for processing

Once you submit your application, it usually takes about seven weeks to receive your ITIN if there are no issues with your paperwork. During peak tax season, this could take longer. If you applied through a CAA or in person, the process might be quicker, since your documents have already been verified.

Use your ITIN for tax filing

Once you receive your ITIN, you can use it to file US tax returns, claim treaty benefits, or fulfil other tax obligations. The ITIN is purely for tax purposes: it does not authorise you to work in the US, and it doesn’t make you eligible for Social Security benefits.

Renew or update your ITIN as needed

Your ITIN will expire if it hasn’t been used on a tax return for three consecutive years or if it was issued before 2013 and hasn’t been renewed. If your ITIN expires, you’ll need to renew it using Form W-7 and the same process.