A Taxpayer Identification Number (TIN), or tax ID number, is what the US government uses to keep track of you or your business for tax purposes. There are different types of TINs, including Employer Identification Numbers (EINs) and Social Security numbers (SSNs). If you’re filing tax returns, claiming benefits, or handling other financial duties, you’ll need a TIN.

Below, we’ll discuss what types of TINs there are, what they’re used for, and how to get the right one for your business.

What’s in this article?

• Types of tax ID numbers
  
• What are tax ID numbers used for?
  
• Do I need a tax ID number?
  
• Tax ID numbers vs. Employer Identification Numbers
  
• How to apply for a tax ID number
  
• How to obtain an Employer Identification Number
  

Types of tax ID numbers

The Internal Revenue Service (IRS) uses different types of TINs to manage tax responsibilities for individuals and business entities. Here’s a rundown of the main types:

• SSN: This is the most common TIN, issued to US citizens and eligible US residents. Individuals primarily use their SSNs for personal taxes and Social Security benefits.

• EIN: This number is issued to businesses and organizations for tax filing and reporting purposes. An EIN is also required when a business wants to open a bank account or apply for licenses.

• Individual Taxpayer Identification Number (ITIN): ITINs are for individuals who are required to have a US TIN but don’t have and are not eligible to obtain an SSN. ITINs are often issued to nonresidents who need to file US tax returns.

• Preparer Tax Identification Number (PTIN): All individuals who prepare or assist in preparing federal tax returns for compensation are issued PTINs. This group includes certified public accountants, enrolled agents, and other tax professionals.

• Adoption Taxpayer Identification Number (ATIN): This is a temporary number assigned to a child in domestic adoption cases when the adoptive parents need to include the child on their tax return before the adoption is finalized.

What are tax ID numbers used for?

Tax ID numbers serve several purposes for businesses and individuals. Their uses include the following:

• Filing taxes: Individuals and businesses use their TINs to file their federal and state tax returns. These numbers help the IRS track and process returns.

• Opening bank accounts: Businesses often need an EIN to open business bank accounts.

• Employment: Employers use their EINs to report taxes and other documents to the IRS and state agencies, particularly for employment taxes.

• Credit and loans: TINs are often required to apply for business loans or lines of credit, with lenders using them to verify the legitimacy of the business.

• Business licenses and permits: During the application process for business licenses and permits, companies are typically required to provide their EINs as part of the application process to ensure all tax obligations are being met.

• Withholding taxes: If you’re hiring or working with contractors, a TIN is required to correctly withhold taxes and issue tax forms such as the W-2 and 1099.

• Healthcare and other benefits: Individuals use their SSNs to access Social Security benefits, Medicare, and other government services.

Do I need a tax ID number?

A business will typically need a tax ID number if any of the following apply:

• If you hire employees, you’ll use an EIN for payroll tax reporting and withholding.

• If you operate as a corporation or partnership, you’ll need an EIN to file business tax returns separate from your personal tax returns.

• If you need to file excise tax returns, employment tax returns, or alcohol, tobacco, and firearms tax returns, it’s necessary to have an EIN.

• If you withhold taxes on income paid to nonresidents, you’ll use your EIN.

• If you have a Keogh plan (a tax-deferred retirement plan for self-employed individuals), an EIN is required.

If you’re unsure whether your business needs one, check the IRS website to determine your eligibility.

Tax ID numbers vs. Employer Identification Numbers

The terms “tax ID number” and “Employer Identification Number” are often used interchangeably, but they refer to different aspects of tax identification. TIN is a general category that includes various types of identification numbers for both individuals and entities, while an EIN is a specific TIN for only businesses and entities. Here’s a closer look at the distinctions between TINs and EINs.

TIN

A TIN is a broad term used to describe any type of number the IRS assigns to an individual or entity for tax purposes. TINs are primarily used to enforce tax laws and include several specific types of identification numbers, including SSNs, EINs, and more. Each type of TIN serves a different purpose based on the specific tax and legal requirements.

EIN

An EIN is a specific type of TIN the IRS issues to business entities such as corporations, partnerships, and sole proprietorships. EINs are used to facilitate business tax filings and comply with employment laws. They’re also used to report taxes, open business bank accounts, apply for business loans, establish credit, secure business licenses and permits, and distinguish a business’s identity from the owner’s personal identity.

How to apply for a tax ID number

The specific application process for a tax ID number depends on the type you need. Here’s how you can apply for the most common types.

SSN

US citizens, permanent residents, and temporary (working) residents all need SSNs. You can apply for an SSN through the Social Security Administration (SSA) at a local SSA office or, in some cases, when you apply for an immigrant visa while living overseas. The application requires Form SS-5 (Application for a Social Security Card) along with proof of identity, age, and citizenship or lawful immigrant status.

EIN

Businesses, including corporations, partnerships, sole proprietorships, nonprofits, government agencies, and certain individuals, all need EINs. You can apply for an EIN online via the IRS website or by fax, mail, or phone. If you apply online, you typically receive your EIN as soon as you complete the application.

ITIN

Nonresidents who need to file US tax returns and are not eligible for SSNs need ITINs. You can apply for an ITIN by completing IRS Form W-7 (Application for IRS Individual Taxpayer Identification Number) and submitting it along with a completed tax return by mail, at an IRS office, or through an authorized acceptance agent. You’ll also need to provide proof of identity and foreign status (e.g., a passport or visa).

PTIN

Paid tax return preparers must have PTINs before they prepare US federal tax returns. You can obtain a PTIN online through the IRS website, a process that can be completed in about 15 minutes. You can also apply by mail, but that can take several weeks to process.

ATIN

An individual needs an ATIN if they are in the process of adopting an American child but can’t obtain an SSN for the child in time for filing their taxes. You can apply for an ATIN by filing IRS Form W-7A (Application for Taxpayer Identification Number for Pending US Adoptions). This application can’t be filed online and must be mailed.

How to obtain an Employer Identification Number

Receiving your EIN is typically a simple, free process. Here’s a step-by-step guide.

Determine your eligibility

Before you apply, ensure your principal business is located in the United States or US territories and that the person applying has a valid TIN (SSN, ITIN, or EIN).

Gather the necessary information

You’ll need to have these details on hand before you begin the application process:

• Legal name of the entity or individual who is applying for the EIN

• Trade name of the business, if it’s different from the legal name

• Address and phone number of the business

• Name and TIN of the principal officer, general partner, grantor, owner, or trustor

• Type of entity (e.g., sole proprietorship, corporation, limited liability company, partnership)

• Reason for applying (e.g., starting a new business, hiring employees, banking purpose)

• Date the business was started or acquired

• Number of employees expected to be hired in the next 12 months

Apply for the EIN

The fastest way to obtain an EIN is through the IRS’s online application. This service is available from Monday–Friday, 7 a.m.–10 p.m. ET. To complete it, visit the IRS website and use the EIN Assistant. On completion, you should receive your EIN immediately and can start using it right away.

If you don’t want to file online, you can complete Form SS-4 (Application for Employer Identification Number) and fax it to the appropriate fax number (you can find this on the IRS website). This method will typically get you an EIN within four business days. You can complete Form SS-4 and mail it to the IRS service center address for your state (this information is also available on the IRS website). If you apply by mail, it might take up to four weeks to process.

International applicants can apply for an EIN by calling 267-941-1099 (not a toll-free number) from 6 a.m.–11 p.m. ET, Monday–Friday. The IRS will assign an EIN at the end of the conversation if all requirements are met.

Receive confirmation

Once your application is processed, you will receive a confirmation letter (CP-575) from the IRS that contains your EIN. If you apply online, you can download, save, and print the confirmation notice immediately.