Taxes can feel complicated, especially if you’re new to running a business or navigating US tax requirements. One of the first things to understand is your Tax Identification Number (TIN), which the IRS uses to track your filings and ensure proper reporting. While many US citizens use a Social Security number, individuals without one and businesses may need to apply for a different type of TIN.
Two terms you’ll likely come across are TIN and Employer Identification Number (EIN). An EIN is a specific type of TIN used for businesses, and understanding the difference can help you choose the right number for your situation. This Remitly guide will walk you through the details in a clear, approachable way, so you can feel confident knowing which number applies to your situation.
What is a Taxpayer Identification Number (TIN)?
A Taxpayer Identification Number (TIN) is a number the IRS uses to identify individuals and entities for tax purposes. Different agencies may issue these numbers, but all are accepted by the IRS to identify you in tax filings and related financial records.
Several types of TINs exist, each serving a different purpose depending on your circumstances. If you’re a US citizen or authorized worker, your TIN is typically your Social Security Number (SSN). Individuals who need a tax ID but aren’t eligible for an SSN may apply for an Individual Taxpayer Identification Number (ITIN) instead.
And if you’ve started a small business or employ others, your business might have an Employer Identification Number (EIN), which is another type of TIN.
Using the correct TIN helps make filing taxes, opening accounts, and completing financial paperwork simpler and more efficient.
The most common types of TINs
Let’s take a closer look at the types of TINs you might encounter:
Social Security Number (SSN)
This is the most familiar type of TIN, issued by the Social Security Administration. It’s used by US citizens, permanent residents, and some temporary residents with work authorization to report income, file taxes, and qualify for benefits like retirement or disability. Employers also use it to report wages to the IRS.
Individual Taxpayer Identification Number (ITIN)
If you’re not eligible for an SSN but still need to file taxes, the IRS issues an ITIN instead. This is the case if you earn income in the US but are a non-resident immigrant, or if you’re a dependent or the spouse of a US taxpayer. ITINs are strictly for tax purposes. They don’t provide work authorization, social security benefits, or immigration status.
For instance, imagine you’re studying abroad in the US, earning money from a research position or freelance work. You may not qualify for an SSN, but you still need to file taxes. That’s where an ITIN comes in.
ITINs help ensure that everyone who earns taxable income can pay and report taxes fairly, regardless of citizenship or immigration status.
Employer Identification Number (EIN)
An EIN is a TIN for businesses, corporations, partnerships, and some trusts or estates. The IRS assigns it to identify your business when you file taxes, report payroll, or open bank accounts.
You’ll need an EIN if your business has employees, operates as a corporation or partnership, or files specific tax returns. Even if you’re a sole proprietor with no staff, many people choose to get an EIN to keep their business and personal finances separate.
Adoption Taxpayer Identification Number (ATIN)
ATINs are temporary numbers issued by the IRS to parents in the process of adopting a child in the US. It lets them claim the child as a dependent on their taxes while waiting for the adoption to be finalized and an SSN to be issued to the child.
Why TINs matter
Having the correct TIN ensures the IRS and financial institutions can accurately identify you for tax reporting, income tracking, and financial transactions. For businesses, it keeps personal and business finances clearly separated, simplifying recordkeeping and compliance.
For newcomers to the US, the different TIN types can be confusing, but each serves a specific purpose. Using the right number helps avoid delays, errors, and unnecessary complications when filing taxes, opening accounts, or completing other official paperwork.
What is an Employer Identification Number (EIN)?
An Employer Identification Number (EIN), sometimes called a Federal Tax Identification Number, identifies a business to the IRS. If an SSN is a personal tax ID, an EIN serves the same purpose for a business. It uniquely identifies your company to the IRS and other agencies.
Why businesses need an EIN
If you plan to hire employees, file payroll taxes, operate as a corporation or partnership, or open a business bank account, you’ll almost certainly need an EIN.
For example, imagine you’ve just started a landscaping business and you’re trying to understand whether you need a TIN or an EIN. First, you might report income under your own name. However, once you hire a few helpers or want to open a business bank account, you’ll need an EIN for payroll reporting and banking. Most financial institutions require one for any account opened in the name of a business.
Common reasons to get an EIN
Here are a few common situations where having an EIN is necessary or helpful.
- Hiring employees: Payroll taxes are tied to your EIN, and it’s required for reporting wages to the IRS.
- Operating as a corporation or partnership: These structures must have an EIN for federal filings.
- Filing specific tax returns: For example, employment or excise taxes.
- Opening a business bank account or credit line: Most banks and lenders require an EIN to verify your business identity.
Even if you’re a sole proprietor with no employees, a freelancer, or have a small online business, an EIN can still be useful. It helps maintain privacy, makes financial management easier, and can add credibility when working with clients or vendors.
Summarizing the TIN vs. EIN difference
While TINs and EINs are related, the key difference comes down to who or what the number identifies. To make things clearer, here’s how TINs and EINs compare side by side:
| Feature | TIN | EIN |
| Primary user | Individuals, non-residents, and businesses | Businesses only |
| Common types | SSN, ITIN, EIN, ATIN | EIN (it’s a type of TIN) |
| Main purpose | General tax administration for all taxpayers | Identifying business entities for tax and payroll purposes |
| Format | Varies (SSN is XXX-XX-XXXX) | Always nine digits (XX-XXXXXXX) |
Understanding this distinction helps ensure you’re using the right number for tax reporting, banking, and other official purposes.
When do you need an EIN for your business?
Not every business needs an EIN, but there are a few common situations where having one becomes necessary or simply helpful.
Hiring employees
Once you bring employees on board, an EIN is essential for reporting wages and managing payroll taxes. The IRS uses your EIN to track how much you withhold from paychecks and the contributions you make.
Operating as a corporation or partnership
Any business structured as a corporation or partnership must have an EIN. This applies whether you’re running a large company or a small business.
Filing certain tax returns
Even if you don’t have employees, you might still need an EIN if you file taxes for excise, employment, or other specialized federal taxes.
Opening a business bank account or credit card
Most financial institutions require an EIN to open a business account or apply for business credit.
Separating business and personal finances
Even if it’s not legally required, many small business owners choose to get an EIN to make their recordkeeping simpler and safer. It’s an easy way to keep your SSN private and reduce the risk of identity theft.
How to apply for a TIN or EIN
Applying for a tax ID number is more straightforward than you might expect, but the process depends on the type you need.
Applying for a TIN
- SSN: Use Form SS-5 with the Social Security Administration. Applicants generally apply in person or by mail if abroad.
- ITIN: Use Form W-7, along with proof of your identity and foreign status. You can apply directly with the IRS or through an ITIN acceptance agent, someone authorized by the IRS to help verify documents for ITIN applications.
- ATIN: Adoptive parents can file Form W-7A to receive a temporary number while waiting for the child’s SSN.
Once you receive your TIN, keep the confirmation document somewhere safe. You’ll need it for all tax filings and financial activities.
Applying for an EIN
If you’re starting or running a business, you can apply for an EIN directly through the IRS website. The online application is free, and you’ll usually get your EIN immediately after completing it.
You can also apply by fax or mail using Form SS-4, but those methods take anywhere from a few days to several weeks.
Only the responsible party for the business should apply. This is typically the owner or principal officer who controls the company’s finances and decision-making.
Keeping your tax ID secure
Once you receive your TIN or EIN, treat it like any sensitive information. Store it securely and share it only with trusted parties, such as your bank, employer, or accountant.
Scammers sometimes impersonate the IRS or banks to request tax IDs. If something feels suspicious, double-check before sharing any information. Remember, the IRS will never ask for your personal details by email or text message.
Making sense of TINs and EINs
Understanding the difference between a TIN and an EIN isn’t just about tax forms; it’s about feeling confident managing your life or business in the US.
TIN is a broad term for any IRS-issued tax numbers, including SSNs, ITINs, ATINs, and EINs. An EIN is a specific type of TIN used primarily for businesses, corporations, partnerships, and some trusts or estates. Even sole proprietors may choose to get an EIN to separate personal and business finances.
If you’re not sure which number applies to you, the IRS website offers clear guidance, and the process of applying is free. Remember, it’s normal to feel uncertain. US tax rules can be complex, especially if you’re just getting started. Once you have the right number, you’ll feel more confident handling your taxes, opening financial accounts, and growing your business.
FAQs
Is an EIN the same as a TIN?
An EIN is a type of TIN, but not all TINs are EINs. TIN is a broad category for tax identification, while an EIN is a specific number for business entities.
Can I use my SSN instead of an EIN?
Yes, if you’re a sole proprietor with no employees and don’t meet other IRS requirements for an EIN. Even then, using an EIN can help protect your SSN and keep finances separate.
How do I apply for an EIN?
The easiest method is online through the IRS website. You can also apply by fax or mail using Form SS-4. International applicants can apply by phone.
Do I need a new EIN if my business changes?
You don’t need a new EIN if you change your business name or move locations.
But if you change your business structure (for example, from a sole proprietorship to a corporation), you’ll need to apply for a new one.
What’s the difference between a TIN, EIN, and ITIN?
A TIN is a general tax ID number that the IRS uses for individuals and businesses. An EIN is a type of TIN for business, while an ITIN is a TIN for individuals who aren’t eligible for an SSN but need to file taxes.