EIN vs ITIN: What’s the Difference?

EIN and ITIN (EIN vs ITIN) are two of the most common types of tax identification numbers. These identifiers can be used for a variety of purposes, and are generally required when applying for licenses, opening a bank account, or running a business. However, they can be a bit confusing, so it’s important to understand the differences.

ITIN and EIN are both used for similar purposes, but are also quite different. Both are nine-digit numbers issued by the Social Security Administration or IRS. Each number carries its own significance. ITINs can be used in place of SSNs, and EINs can be used for both business and personal purposes.

Differences Between EIN and ITIN

The number of Employer Identification Numbers (EINs) that a company or individual may own is unlimited in the USA. The Internal Revenue Service (IRS) advises against getting several EINs for the same firm unless there is a legitimate purpose, even without a set limit.

A distinct EIN is often required for each distinct legal entity, including corporations, partnerships, trusts, and sole proprietorships. Businesses that want to have multiple EINs must adhere to certain regulations. Of them,

• Different Business Entities: Like corporations, and LLCs, each entity should have its own EIN.
• Separate Divisions or Locations: If a business operates multiple divisions or locations each division or location may need its own EIN.
• Succession or Change in Ownership: A new EIN may be obtained to reflect the change in ownership.
• Bankruptcy or Reorganization: The reorganized entity may require a new EIN.
• Trusts and Estates: Different trusts or estates typically require separate EINs.

What is EIN?

The employer identification number is known as EIN (What is an EIN number?). It’s employed to determine which companies will submit business tax returns. To create a business checking account, file your business taxes, and apply for required licenses, you will need your employment identification number.

Nine digits in the format XX-XXXXXXXX make up the EIN. An employer, lone proprietor, partnership, company, nonprofit, decedent’s estate, government agency, foundation, particular people, or business entity may be granted an EIN.

Once your business has registered as a limited liability corporation (LLC), you need to get an Employer Identification Number from the IRS. You can have it immediately and without cost after authentication.

You need to get an employer identification number if you employ one person or more people. It is nevertheless advisable to have a company number even if you are a single-member LLC and are not required to obtain one.

What is ITIN?

For individuals who are obliged to have a taxpayer identity number for tax reasons but are not qualified to get a Social Security Number (SSN), the Internal Revenue Service (IRS) issues Individual Taxpayer identity Numbers (ITINs), which are unique identification numbers. The ITIN does not confer work privileges or Social Security benefit eligibility; it is solely used for federal tax reporting.

The US tax collection department, known as the Internal Revenue Service (IRS), is responsible for issuing ITIN numbers.

There are three general types of taxpayer ID numbers:

Taxpayer ID Numbers	Abbreviations
Social Security Number	SSN
Individual Taxpayer Identification Number	ITIN
Employer Identification Number	EIN

Let’s take a closer look at the comprehensive definitions of these concepts and the difference between EIN and ITIN.

EIN vs ITIN: What’s the Difference?

The criteria for obtaining an Individual Taxpayer Identification Number include:

• Being a nonresident alien obligated to file a U.S. tax return
• Qualifying as a U.S. resident alien and filing a U.S. tax return based on days spent within the United States
• Being a dependent or spouse of aS.A. citizen or resident alien
• Being a dependent or spouse of a nonresident alien visa holder
• Being a nonresident alien seeking tax treaty benefits
• Being a nonresident alien student, professor, or researcher filing a U.S. tax return or seeking an exemption

Taxpayer Identification Numbers (TIN) and EIN

The IRS uses a word named Taxpayer Identification Numbers (TIN), which is a general term that can refer to a wide range of numbers in different formats. The purposes of various Taxpayer Identification Numbers differ. Certain numbers in various formats correspond to personal taxes, while others show company taxes on tax IDs.

When filling out personal or business documents, you’ll need to provide your tax identification number. For the same purpose, you can input multiple numbers; employer identification numbers and TINs are the most frequently entered.

A business’s tax identification number is called a taxpayer identification number, or TIN. Its purpose is to uniquely identify an individual or entity on tax return documentation.

TINs now have many uses and can be used for many different things. It is applicable in the subsequent circumstances:

• Buying a house or car
• Opening a personal or business bank account
• Get a credit limit
• Sign up for Medicare
• Applying for a government-approved identification document, such as a passport or driver’s license.

The IRS or Social Security Administration may issue a TIN.

The employer identification number is abbreviated as EIN. It’s employed to determine which companies will submit business tax returns. To create a business checking account, file your business taxes, and apply for required licenses, you will need your employment identification number.

What is the Difference Between EIN and ITIN?

“Is tin and ein the same?” Employer ID Number (EIN) is a business’s federal tax identification number. Although it is an identifier for employers, you do not have to have employees need an EIN.

Individual Taxpayer ID Number (ITIN) is a nine-digit number and number issued by the Internal Revenue Service (IRS) and assigned to individuals who must have an identifying number but who are eligible for neither a Social Security Number nor an Employer Identification Number. (Difference between EIN and ITIN)

SSN vs. EIN vs. ITIN: The Business Owner’s Guide to Taxpayer Identification Numbers

ITINs are for reporting purposes only and are not available for identification purposes. Let’s say you have a single partner LLC or sole proprietorship and do not have to apply for an EIN. You can use your Social Security Number for tax transactions. However, most single-partner LLCs and sole proprietorships obtain an EIN to separate their companies and their tax liabilities. So, An EIN looks more professional than an SSN when doing business with third-party companies and contractors.

As a result, the EIN also gives information about your company whereas the SSN provides information about you. Thus, using an EIN is better than using an SSN to avoid the risk of personal identity theft. We hope that the difference between EIN and ITIN is summarized.

The Main Difference Between EIN and ITIN

When it comes to the difference between EIN and ITIN, there is an important detail that comes to mind. Although EIN has taken on the role of a taxpayer ID number, its purpose is for companies. In other words, it may not always be possible to give a positive answer to the question “Can I use ein instead of itin?”

When it comes to the difference between EIN and ITIN, it is necessary to know that ITIN is an individual option. Although in some cases decisions regarding the company can be made with ITIN, it will not be possible to use ITIN if the company grows.

What is the Main Purpose of Ein or Tin Number?

After discussing the details about the difference between EIN and ITIN, we wanted to take a closer look at EIN. Here are some things you can do with EIN:

• You can open a bank account in the name of a company.
• You can apply with an EIN when applying for a loan for a company
• You can hire employees for the company.
• You can file federal taxes.

Is EIN Only used for US Companies?

The Employer Identification Number (EIN) is mostly used by US-based businesses or those with US tax obligations. For tax reporting, the Internal Revenue Service (IRS) assigns it to business entities.

Foreign companies outside the US can also receive an EIN  if they conduct business in the United States or have U.S. tax reporting responsibilities, even though the EIN is specifically for U.S.-based corporations. To comply with U.S. tax regulations, foreign firms having subsidiaries, partnerships, or branches in the country must obtain an EIN Number.

Generally speaking, however, businesses that only conduct business companies outside the US and are not liable for US taxes do not require an EIN.

How do I get an EIN number outside the USA?

To obtain their EIN, international applicants can call 267-941-1099 (not a toll-free number) Monday through Friday from 6 a.m. to 11 p.m. (Eastern Time). To obtain the EIN and respond to inquiries about Form SS-4, the caller must be authorized.

What is the ITIN number used for?

Providing a reliable way of processing and tracking tax returns and payments for persons who are not qualified to get a Social Security number, ITINs assist individuals in adhering to U.S. tax regulations.

Both residents and non-residents of the United States are eligible for an Individual Taxpayer Identification Number regardless of their immigration status. However, according to the Internal Revenue Code, foreign nationals may be obliged to file or report taxes in the country. Federal tax reporting needs the use of Individual Taxpayer Identification Numbers.

Importance of ITIN application

The application for an ITIN is crucial for people who have financial responsibilities or tax obligations in the United States but are not qualified to get a Social Security Number (SSN). One way to adhere to US tax requirements is through ITIN. Among the factors influencing the significance of ITIN application:

Tax Compliance

The Internal Revenue Service (IRS) requires individuals to have an Individual Taxpayer Identification Number in order to submit tax returns, record their income, and fulfill other tax-related requirements.

Access to Tax Benefits

People who possess an ITIN are eligible to benefit from all credits, deductions, and exemptions available to them under the U.S. tax code.

Legal Documents

Individuals who qualify for an ITIN are given a unique number that they can use to apply for loans and open bank accounts, among other financial operations.

Preventing Tax Withholding: Individuals who do not have an SSN or ITIN may be financially impacted by tax withholding on income received in the USA

Compliance with Financial Institutions: When making financial transactions, a taxpayer identification number is often required by financial institutions. Individual Taxpayer Identification Number possession is proof of conformity with applicable regulations.

Access to Services: Government agencies, educational institutions, and other US organizations may demand the possession of an Individual Taxpayer Identification Number to grant access to specific services or benefits.

Use of EIN number in the USA

EIN is an employer identification number. An EIN is a unique nine-digit number issued by the IRS to identify businesses and other entities operating in the United States for tax purposes. It is also referred to as the Federal Tax Identification Number.

Organizations that require EIN include;

• C corporations;
• S Corporations;
• Limited Liability Companies (LLCs);
• Limited Partnerships (LPs);
• Partnerships;
• Properties;
• Trusts;
• Non-profit organizations such as charities, religious organizations, and educational institutions;
• Farmers’ cooperatives;
• Plan administrators;
• Sole proprietors with employees.

Get an EIN number with professional support

To obtain an Employer Identification Number (EIN) with professional support

Steps of the getting an EIN number with professional support	Details
Consult a Professional	Contact a tax professional, accountant, or business attorney who can guide you through the process.
Gather Required Information	Collect all necessary information for the EIN application, including your business name, structure (e.g., sole proprietorship, partnership, corporation), and the names and Social Security Numbers (SSNs) of the principal owners or officers.
Complete the Application	The professional will help you complete Form SS-4, “Application for Employer Identification Number.”
Submit the Application	Your tax professional can submit the completed Form SS-4 to the IRS on your behalf. This can be done online, by fax, or by mail.
Receive Your EIN	Once the application is processed, you will receive your EIN. Your professional will ensure that you obtain and securely store this number for future use in tax filings and business operations.
Update Records	After receiving the EIN, update your business records and inform relevant entities, such as banks, vendors, and tax authorities, of your new EIN.
Ensure Compliance	Your professional can assist in ensuring that your business complies with all tax and regulatory requirements related to your new EIN.

 

How to get ITIN number for free?

It costs $0 to apply for an ITIN straight from the IRS. It should be noted that there is a price associated with using Certified Admissions Agents (CAAs) or other approved representatives for assistance. While assistance from authorized providers is customary during the application process, the Internal Revenue Service is unrelated to these payments.

Frequently Asked Questions About EIN vs ITIN

If you’re doing business in the U.S., you’ll likely need an identification number. These numbers help the IRS track tax obligations for individuals and companies. Below are the most common questions about EIN and ITIN.

Why are identification numbers used in the U.S.?

In the United States, various identification numbers are used to identify both individuals and businesses. These numbers serve a similar function to Social Security Numbers (SSNs) and are essential for legal and financial processes.

When do you need an EIN?

Businesses use an EIN on official documents and financial transactions. Any entity operating in the U.S. for profit and handling payroll or federal taxes must have an EIN. It’s essentially the Social Security Number for your company.

What is an ITIN (Individual Taxpayer Identification Number)?

An Individual Taxpayer Identification Number (ITIN) is also a 9-digit number, beginning with “9,” used by individuals who are not eligible for a Social Security Number but must file a U.S. tax return. It is issued by the IRS for tax reporting purposes only.

Who needs an ITIN?

ITINs are for:

• Foreign nationals not eligible for SSNs but required to file tax returns.
• Non-U.S. residents who earn U.S.-sourced income.
• Spouses and dependents of U.S. citizens or visa holders who need to file taxes.
• Individuals settling in the U.S. who are obligated to submit tax documents.

 

Why is ITIN important for business owners?

Even if you don’t live in the U.S., if your company generates income, profit, or loss from U.S. sources and that income is distributed to members or shareholders, you’ll likely need an ITIN to fulfill tax obligations. The ITIN allows non-resident owners to report and pay taxes legally.

When is ITIN mandatory?

Anyone required to file a tax return with the IRS, regardless of immigration status, must have an ITIN. It’s a legal requirement, not an option, for tax compliance in the U.S.

What is the most important difference between EIN and ITIN?

The most important difference between EIN and ITIN is that EIN is a company number, while ITIN is an individual tax ID number.

What is the difference between Tax ID and ITIN?

The difference between Tax ID and ITIN is that ITIN is processing as an individual tax ID. Tax ID is a concept that includes ITIN.

How to get ITIN for non resident?

Another detail that needs to be known about the difference between EIN and ITIN is the ITIN application. You do not have the right to apply online when applying for ITIN. Instead, you can apply to the service IRS by mail or get support from ein-itin.com.

Can an undocumented person start an LLC?

Yes, undocumented individuals can start an LLC in the U.S. using an ITIN instead of an SSN. The process varies by state, so legal guidance is essential. For step-by-step help, consult the experts at ein-itin.com for personalized support.

Can you be self-employed with an ITIN number?

Absolutely. With an ITIN, you can work as a freelancer, contractor, or business owner in the U.S. To understand how to structure your business legally, reach out to ein-itin.com for trusted advice.

Do I need an EIN if I start an LLC?

Yes, most LLCs need an EIN to open a bank account, hire employees, and file taxes. Even single-member LLCs often benefit from having one. Need help applying? The team at ein-itin.com makes it easy.

Can I get a phone with my EIN number?

Some business phone providers allow you to open accounts using your EIN. However, credit checks may still require a SSN or ITIN. ein-itin.com can guide you on setting up your business identity the right way.

Is my EIN also my TIN?

Yes, an EIN is a type of Taxpayer Identification Number (TIN) used by businesses. But not all TINs are EINs—like SSNs and ITINs. Confused? Let ein-itin.com explain the differences clearly.

Is it better to use EIN or SSN?

For business purposes, it’s usually better to use your EIN to protect your personal SSN. This adds privacy and separates your business identity. Want to learn more? Contact ein-itin.com for expert guidance.