Is EIN the same as tax ID?

An Employer Identification Number (EIN) and a Taxpayer Identification Number (TIN) are both identification numbers used for tax purposes by the Internal Revenue Service (IRS). However, while they serve similar functions, they are not exactly the same thing.

What is an EIN?

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS to businesses for the purposes of identification. Some key facts about EINs:

• EINs are used to identify tax accounts for businesses and other entities (not individuals).
• They are required for all businesses with employees, partnerships, corporations, trusts, estates, nonprofits, and LLCs (even single-member LLCs).
• Sole proprietors without employees generally do not need an EIN, they can use their Social Security Number instead.
• EINs must be applied for through the IRS, either online, by fax, or by mail. They are issued immediately upon application.
• Each business entity must have its own unique EIN, even if owned by the same people.
• EINs are solely for tax identification purposes. They do not replace required licenses and permits.

So in summary, the EIN is specifically an employer tax identification number used by businesses and organizations to identify their business tax accounts with the IRS. Some key entities that need an EIN include:

• LLCs
• Corporations
• Partnerships
• Trusts and estates
• Nonprofit organizations
• Businesses with employees

What is a Taxpayer Identification Number (TIN)?

A Taxpayer Identification Number (TIN) is a generic term used by the IRS meaning any number used to identify tax accounts. This includes:

• Social Security Numbers (SSNs) issued to individuals
• Employer Identification Numbers (EINs) issued to businesses
• Individual Taxpayer Identification Numbers (ITINs) issued to foreign individuals

So an EIN is one specific type of Taxpayer Identification Number used for business tax identification purposes. But a TIN could also be an SSN or ITIN used for individual tax identification.

Some key facts about TINs in general:

• Used by the IRS for processing tax returns and tracking tax obligations
• Required information on all tax forms (W-2s, 1099s, etc)
• All businesses must have a TIN even if no EIN (use SSN instead)
• Individuals use SSN as their TIN in most cases
• Non-resident foreign individuals use ITIN as their TIN

So in essence, EINs are used by businesses as their specific type of Taxpayer Identification Number for interfacing with the IRS. But individuals use SSNs or ITINs as their Taxpayer Identification Number instead.

Key Differences Between EIN and TIN

While EINs are a form of TIN, there are some important differences:

Some key takeaways from these differences:

• EINs are exclusively for business use, while TIN is a broader term that includes individuals
• TINs can be SSNs, EINs, or ITINs depending on if for an individual or business
• The purpose of an EIN is specifically employment tax identification
• TIN is a more generic tax identification term used by the IRS

So in summary, EINs are a specific type of TIN used by businesses, while individuals use SSNs or ITINs as their TIN for tax purposes. But the terms are not interchangeable – all EINs are TINs, but not all TINs are EINs.

When is an EIN Required vs. a TIN?

When is specifically an EIN required by a business, vs. when can a more generic TIN be used instead?

EIN Required for:

• Businesses with employees
• LLCs (even single member LLCs)
• Partnerships
• Corporations
• Trusts and estates
• Nonprofit organizations

Essentially, any business entity with employees or organized as anything other than a sole proprietorship should have its own EIN.

TIN Can Be Used Instead of EIN for:

• Sole proprietors without employees
• Single member LLCs without employees
• Individual landlords
• Self-employed independent contractors

For these types of entities, the business owner’s SSN can be used as the Taxpayer Identification Number instead of assigning a separate EIN specifically for the business.

But overall, most organized business structures will need their own EIN, even if they have no employees. This includes multi-member LLCs, partnerships, corporations, nonprofits, trusts and estates. Basically any business entity that will fill out its own tax return separate from the owner’s personal tax return should have an EIN.

How to Get an EIN

If you determine your business needs its own EIN, how do you go about getting one from the IRS? There are a few options:

Online

Applying online at the IRS website is the fastest and simplest way to get an EIN instantly. You can apply at www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. You’ll get your EIN immediately upon completing the online application.

Fax

You can also fax in a completed SS-4 application form to the IRS and receive your EIN back by fax generally within 4 business days. The fax number is 855-641-6935.

Mail

Finally, you can mail in a completed SS-4 application form and receive your EIN by mail within 4 weeks. Mail to the address on the form instructions.

Key tips for applying:

• Only apply once per entity, duplicate EIN requests will be denied
• Save confirmation notice containing EIN for your records
• List same responsible party on SS-4 as you do on your taxes

And that’s the scoop on how to get an EIN! Online application is best for immediate needs.

How to Get a TIN

If you are an individual taxpayer instead of a business, how do you get a Taxpayer Identification Number (TIN) for tax filing purposes?

For individual taxpayers, in most cases your Social Security Number (SSN) issued by the Social Security Administration serves as your TIN to use for tax purposes.

You are typically assigned an SSN automatically shortly after birth when your birth certificate is filed. You can also apply for an SSN later in life if needed.

The only exception would be non-resident alien individuals in the U.S. on temporary visas. These foreign individuals who do not qualify for an SSN would need to apply for an Individual Taxpayer Identification Number (ITIN) from the IRS instead.

ITIN applications require in-person document verification or certified acceptance agent assistance. The W-7 form must be completed with original identification documents or notarized copies.

So in summary:

• U.S. citizens use existing SSN as their individual TIN
• Foreign individuals in U.S. temporarily use ITIN as TIN
• Most people never need to apply for a TIN, already have via SSN

Basically, unless you are a non-resident foreigner working temporarily in the U.S., you likely already have an SSN that serves as your individual Taxpayer Identification Number.

Using Your EIN or TIN

Once you have an EIN or other Taxpayer Identification Number assigned by the IRS, how do you use it? Here are some key ways TINs and EINs are utilized:

Filing Business Tax Returns

One of the most important uses for your EIN or TIN is filing required tax returns:

• Businesses file returns using EIN as identification
• Individuals file returns using SSN as identification
• Partnerships, corporations file with EIN
• Sole props can use SSN instead of EIN if no employees

This allows the IRS to match filed returns to the correct taxpayer entity.

Employment Tax Reporting

Businesses with employees must report payroll taxes using their EIN:

• Report payroll taxes on Form 941 quarterly
• Issue W-2s to employees listing company EIN
• Use EIN for employment tax withholding accounts

This allows the IRS to track payment of employment taxes linked to the employer.

Bank Accounts

EINs can be used to open business bank accounts to keep finances separate from personal.

Licenses, Permits, Applications

Many license, permit, and other business applications will request the company’s EIN.

Legal Paperwork

EINs are commonly referenced on legal contracts, tax exemption forms, articles of incorporation, etc.

Conclusion

In summary:

• EINs are employer identification numbers used by businesses for tax purposes
• TIN is a broader term that includes EINs, SSNs, and ITINs
• Most businesses need their own EIN, which is used for tax filing, employment taxes, banking, licenses, legal forms, etc
• Individuals use their SSN as a Taxpayer Identification Number in most cases
• Foreign individuals in the U.S. temporarily get an ITIN for tax filing
• Although related, EIN and TIN are not interchangeable terms

The key takeaway is that while EINs are a specific form of TIN, they are not the same. EINs are exclusively for business use, while TIN is a more generic term that could refer to a number of different tax identification types.

So in most situations, a business will need its own dedicated EIN to properly report taxes, pay employees, open a bank account, and complete other essential business functions.