What are the differences between SSN, EIN, and ITIN

Tax identification numbers can be confusing for many. How do we tell them apart, such as a Social Security Number (SSN), an Employer Identification Number (EIN), and an Individual Taxpayer Identification Number (ITIN)? Can they be used interchangeably? Do you find yourself asking, “Do I need an SSN, EIN, or ITIN?”

Read on to understand the difference between EINs, SSNs, and ITINs, and when you’ll need each one.

Understanding the Taxpayer Identification Number (TIN)

A Taxpayer Identification Number (TIN) is a unique number that identifies an individual, a business entity, or a non-profit organization. Every individual or company must have its own TIN. Taxpayer identification numbers are available from any country, but their application process and format vary.

In the US, anyone filing annual tax returns with the IRS must have a TIN. These include SSNs, EINs, ITINs, ATINs, and PTINs. The IRS uses these nine-digit numbers to track taxpayers.

What is a Social Security Number (SSN)?

A Social Security Number, known as an SSN, is issued only to individuals. US citizens, permanent residents, and some temporary residents can apply for a Social Security Number. SSNs are the only unique identification numbers in the US not issued by the IRS. Instead, SSNs are issued by the Social Security Administration (SSA). A Social Security Number is formatted as nine digits with the structure XXX-XX-XXXX.

Do I need an SSN?

You will need an SSN for legal employment in the US or to benefit from other government services. All US citizens, permanent residents, and temporary immigrant workers need a Social Security Number.

Children need an SSN or an ITIN for their parents to claim them as dependents and obtain certain tax benefits. This means most parents will apply for an SSN for their child. Applying for an SSN is free. However, you can also pay for a service that will complete the application process for you.

According to the Social Security Administration, individuals who can apply for an SSN include:

• Non-citizens
• International students
• Foreign workers
• Children of citizens
• Deferred Action for Childhood Arrivals applicants
• Survivors of domestic violence

How to apply for an SSN?

To apply for an SSN, you must complete Form SS-5, Application for a Social Security Card. You will need to provide proof of your identity, age, and US status.

Alternatively, you can visit a local Social Security Office or call to apply for an SSN. You can apply by phone at 1-800-772-1213. The office is open from 8:00 a.m. to 7:00 p.m., Monday through Friday.

According to the Social Security Administration, you can expect your Social Security card within two weeks after submitting all required documents for application processing. This timeframe assumes that verification of immigration documents with USCIS is complete.

What is an Employer Identification Number (EIN)?

An Employer Identification Number or EIN is issued to business entities, such as LLCs, corporations, trusts, and estates that need to pay taxes. You can use an EIN to report capital gains and business income for tax purposes. An EIN is formatted like an SSN with nine digits but differs in distribution. An EIN reads as XX-XXXXXXX.

Growth Business issues EINs for all LLCs it forms, as it is essential for opening bank accounts and filing tax returns.

Do I need an EIN?

Generally, any business entity needs an EIN. This includes LLCs, S-corporations, C-corporations, 501(c)3 non-profits, trusts, estates, and non-resident LLCs. You will need an EIN for your company to hire employees, open a business bank account, file taxes, or withhold taxes from non-wage income.

How to apply for an EIN?

To obtain an EIN, you must complete 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 commencing operations. The application asks for the name of the principal officer, partner, grantor, owner, or any other title of the company, along with their taxpayer identification number.

The time it takes to get an EIN varies depending on the application method. If you apply online, you will receive the EIN immediately. If you apply by phone, mail, or fax, processing can take two to five weeks.

Growth Business provides an EIN for all LLCs it forms, within 1 to 5 business days!

What is an Individual Taxpayer Identification Number (ITIN)?

An Individual Taxpayer Identification Number, or ITIN, is offered to certain non-resident and resident aliens, their spouses, and their dependents. You cannot obtain an ITIN if you are eligible for an SSN. ITINs are formatted the same way as SSNs, with nine digits: XXX-XX-XXXX.

Do I need an ITIN?

A foreign individual who does not have an SSN and cannot obtain one may get an ITIN. If you are not eligible for an SSN but need to file taxes or open a US bank account, you may need an ITIN.

According to the IRS, a foreign resident who does not have and cannot obtain an SSN must use a Taxpayer Identification Number. The IRS defines a foreign individual as a resident alien for 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 will need to complete Form W-7 and submit supporting documents for your residency 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 you your taxpayer identification number within seven weeks. However, this can take up to 11 weeks if you apply during peak tax periods or from abroad.

Frequently Asked Questions (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 for tax filing. Sole proprietorships and single-member LLCs can use their Social Security Number as long as they are owned by US residents. If owned by foreigners, they must use their company's EIN in all cases.

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 form if you work through an LLC. When submitting a W-9 form to any company that pays you over $600 a year, you can list either the LLC and its EIN or your individual SSN.

Is an EIN only for businesses, or can individuals obtain one too?

An EIN is only for businesses. Individuals can obtain an EIN by forming a business entity such as an LLC or corporation. As an individual, you will use a Social Security Number or an ITIN.

Do I still need an SSN if I have an EIN?

Sole proprietorships, LLCs, corporations, partnerships, non-profits, trusts, estates, government agencies, and other business entities can use EINs. You will still need an individual taxpayer identification number, such as a Social Security Number, if you have an EIN.