Do I Need an SSN, EIN, or ITIN? How Are They Different?
Uncategorized EIN, ITIN, SSN
Don’t know the difference between an SSN, EIN, or ITIN? We break it down in this post.
Tax numbers are confusing for many. How do you tell the difference between a Social Security Number, Employer Identification Number, and Tax Identification Number? Can you use them interchangeably? You might wonder, “Do I need an SSN, EIN, or ITIN?” Read on to understand the difference between EIN, SSN, and ITIN and when you’ll need each.
Understanding Tax Identification Number (TIN)
A Tax Identification Number (TIN) is a unique number identifying an individual, business entity, or non-profit organization. Each person or company must have its own TIN. Taxpayer identification numbers are available from any country, but the application process and format vary.
In the US, anyone filing annual tax returns with the IRS must have a TIN. These include SSN, EIN, ITIN, ATIN, and PTIN. The IRS uses these nine-digit numbers to track taxpayers.
The two most common US tax identification numbers are Social Security Numbers (SSN) and Employer Identification Numbers (EIN). In addition, the US issues an Individual Taxpayer Identification Number (ITIN) to nonresidents or resident aliens, their spouses, and children if they meet certain criteria. You may also be eligible for a TIN for pending US adoptions, called an ATIN. There’s also a preparer Taxpayer Identification Number called PTIN.
What Is a Social Security Number (SSN)?
A Social Security Number, commonly abbreviated as SSN, is issued to individuals. US citizens, permanent residents, and some temporary residents can apply for a Social Security Number. SSNs are the only US TIN that the IRS doesn’t issue. Instead, SSNs are issued by the Social Security Administration. A Social Security Number is formatted in nine digits with a structure that looks like XXX-XX-XXXX.
Do I Need an SSN?
You’ll need an SSN for legal US employment or to take advantage of other government services. All US citizens, permanent residents, and temporary nonimmigrant workers need a Social Security Number.
Children need a Social Security Number or an ITIN for parents to claim them as a dependent and gain some tax benefits. That means most parents will apply for an SSN for their child. It’s free to apply for an SSN. However, you could also pay for a service to complete the application process for you.
According to the Social Security Administration, people who can apply for an SSN include:
- Noncitizens
- International students
- Foreign workers
- Citizen children
- Deferred action for childhood arrivals applicants
- Domestic violence survivors
How to Apply for an SSN?
To apply for an SSN, you need to complete Form SS-5, Application for a Social Security Card. You’ll have to provide evidence of your identity, age, and status in the US.
Alternatively, you can visit a local Social Security Office or call to apply for an SSN. You can apply by phone on the number 1-800-772-1213. The office is open between 8:00 a.m. and 7:00 p.m., Monday through Friday.
According to the Social Security Administration, you can expect your Social Security card within two weeks after you have submitted everything to process the application. This time assumes that verification of immigration documents with the USCIS is complete.
What Is an Employer Identification Number (EIN)?
An Employer Identification Number or EIN is issued to business entities, including LLCs, corporations, trusts, and estates that must pay taxes. You can use an EIN to report capital gains and business income for taxation purposes. An EIN is formatted like an SSN with nine digits but distributed differently. An EIN read as XX-XXXXXXX.
Do I Need an EIN?
Generally, any business entity needs an EIN. This includes LLCs, S-corporations, C-corporations, 501(c)3 non-profit corporations, trusts, estates, and LLCs for non-residents. You will need an EIN for your company to hire employees, open a business bank account, file taxes, or withhold taxes from income other than wages.
How to Apply for an EIN?
To get an EIN, you must fill out form SS-4 with the IRS. You can apply for an EIN online, by phone, fax, or mail. All business entities must apply for an EIN before beginning operations. The application asks for the name of the company’s principal officer, partner, trustor, owner, or any other title, along with their taxpayer identification number.
How long it takes to get an EIN varies by application method. If you apply online, you should receive the EIN immediately. If you apply by phone, mail, or fax, processing can take two to five weeks.
What Is an Individual Taxpayer Identification Number (ITIN)?
An Individual Taxpayer Identification Number or ITIN is offered to some nonresident and resident aliens, their spouses, and dependents. You cannot get an ITIN if you’re eligible for an SSN. ITINs are arranged in the same format as an SSN, with nine digits: XXX-XX-XXXX.
Do I Need an ITIN?
A foreign person who doesn’t have an SSN and can’t get one, can get an ITIN. If you’re not eligible for an SSN but need to file taxes or open a bank account in the US, you may need an ITIN.
According to the IRS, a foreign resident who doesn’t have and can’t get an SSN must use an Individual Taxpayer Identification Number. The IRS defines a foreign person as a resident alien for income tax purposes based on the number of days they are present in the United States.
How to Apply for an ITIN?
To apply for an ITIN, you’ll need to complete Form W-7 and submit supporting documents for your residence status. You can get help applying for an ITIN through certain banks, colleges, or accounting firms.
According to the IRS, if you qualify for an ITIN and your application is complete, the IRS will send a letter assigning your tax identification number within seven weeks. But this can take up to 11 weeks if you apply during peak tax times or from abroad.
Get Support Getting an ITIN
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FAQs
Should I use an EIN or SSN for an LLC?
Whether you need an SSN or EIN to file taxes for your LLC depends on the business structure. Multi-member LLCs must use an EIN to file taxes. Sole proprietors and single-member LLCs can use their Social Security Numbers. Check with a CPA for individual LLC considerations.
Can I use my EIN instead of an SSN for tax purposes?
You can use an EIN instead of an SSN on a W-9 if working through an LLC. When you file a W-9 form with any company that pays you more than $600 per year, you can then list either the LLC and its EIN, or your individual SSN.
Is an EIN only for businesses or can individuals also obtain one?
An EIN is only for businesses. Individuals can obtain an EIN by establishing a business entity such as an LLC or corporation. As an individual, you’ll use a Social Security Number or ITIN.
Do I still need an SSN if I have an EIN?
Sole proprietors, LLCs, corporations, partnerships, non-profit corporations, trusts, estates, government agencies, and other business entities can all use EINs. You will still need an individual tax identification number, such as a Social Security Number if you have an EIN. Speak with a tax advisor to understand your tax situation’s obligations.
Can an ITIN be used as a substitute for an SSN or EIN?
If you don’t have an SSN, you could use an ITIN to open interest-bearing accounts. You cannot use an ITIN in place of an EIN for business entities. Some states also allow you to receive a driver’s license, driver’s permit, or state identification card.
Can I use my ITIN for employment purposes?
You can’t use an ITIN for employment purposes. An ITIN is only available to residents and nonresidents who are ineligible for US employment. You can get an ITIN for other tax purposes.
Can I apply for both an ITIN and an SSN simultaneously?
You could apply for both simultaneously, but since an ITIN will not be issued to you once you have an SSN, it might not make sense. If you are later able to apply for an SSN after previously using an ITIN, you will need to stop using the ITIN.