What is Tax Identification Number (TIN)?

What is a tax ID number (TIN)?

A taxpayer identification number (sometimes called a TIN) is a unique number issued by the government to an individual or entity. It allows the issuing authority to easily identify taxpayers. In the U.S., the Internal Revenue Service and the Social Security Administration are responsible at the federal level for issuing these numbers. Businesses obligated to pay state taxes or perform certain activities in a state may also need to obtain one or more state tax ID numbers.

Types of Tax Identification Numbers (TIN)

There are several types of tax identification numbers for different categories of businesses and individuals.

Social Security number (SSN)

SSNs are issued to individuals, sole proprietors, and single-member LLCs. Independent contractors also need one for tax purposes. SSNs allow the Social Security Administration to track lifetime earnings and calculate benefits. They’re also used when filing taxes and applying for jobs. Eligible parties can receive this TIN by completing Form SS-5 (Application for a Social Security Card).

Employer identification number (EIN)

EINs are business tax IDs that apply to employers, corporations, partnerships, and multi-member LLCs. They’re used for tax administration and compliance purposes. Eligible parties can receive this TIN by completing Form SS-4 (Application for Employer Identification Number).

Individual taxpayer identification number (ITIN)

ITINs are for nonresident and resident aliens, their spouses, and dependents who cannot get a SSN. Unlike a SSN, ITINs are used only for tax compliance and reporting. Eligible parties can receive this TIN by completing Form W-7 (Application for IRS Individual Taxpayer Identification Number).

Taxpayer identification number for pending U.S. adoptions (ATIN)

ATINs apply to individuals who are legally adopting a U.S. citizen or resident child, but only if the child does not have a SSN. Eligible parties can receive this TIN by completing Form W-7 A (Application for Taxpayer Identification Number for Pending U.S. Adoptions).

Preparer taxpayer identification number (PTIN)

PTINs are for individuals who prepare or assist in preparing federal tax returns. Eligible parties can receive this TIN by completing Form W-12 (IRS Paid Preparer Tax Identification Number Application and Renewal).

State taxpayer identification number

These apply to business entities that are required to pay state taxes. Eligible parties must file with their state’s tax agency to receive this TIN.

When is a TIN required?

In general, you'll need a TIN if you conduct business in the U.S., are required to file taxes, receive certain government benefits, or meet other specific criteria. Individuals need a SSN or an ITIN to file personal taxes, work, or apply for government services.

Businesses must obtain an EIN if they hire employees, file tax returns, operate as a partnership, corporation, or multi-member LLC, or meet other requirements set by the IRS. This applies to both private businesses and federal employers.

How do you get a TIN?

The process for obtaining a tax ID number depends on whether you need one for an individual or a business.

Individuals

You’ll need to provide the required documentation, such as a birth certificate, to prove your identity to the Social Security Administration. Once you’ve gathered the required documents, you can complete an application for a Social Security card. The completed application can be filed at any Social Security office or mailed to the appropriate address.

An ITIN can be obtained by filing Form W-7 with the IRS. Like the SSN application, you must provide documentation confirming your identity and legal status within the U.S. The completed application can be filed several ways, including by mail, in person at a designated IRS Taxpayer Assistance Center, or through an IRS-authorized acceptance agent.

Businesses

You can file an EIN application by mail, fax, or online. In some cases, you can also file by telephone. If applying by fax or mail, you must complete Form SS-4 and submit it to the appropriate IRS address or fax number.

Whichever method you choose, the process usually involves three straightforward steps:

1. Register your business with the state: Before applying for a federal tax ID, you must register your business with the state where you plan to operate. This process typically involves choosing a business structure, such as a corporation, partnership, or LLC, and registering your business name with the state's Secretary of State office or business registry agency.
2. Gather required information and documents: To complete the tax ID application, you'll need specific details about your business, including the formation date, legal business name and address, the owner's SSN or ITIN, and the number of employees you expect to hire in the next 12 months.
3. Submit your application: Once you've registered your business, gathered the necessary information, and chosen an application method, you'll need to provide the details to the IRS by filling out Form SS-4. Be sure to complete all required fields accurately and submit the form using your selected method. If applying online, you'll receive your EIN instantly.

What is a foreign tax ID?

A foreign tax ID or foreign TIN is used by your country of tax residency to identify you as a taxpayer or individual. For example, you may need a foreign tax ID if you’re a U.S. citizen working remotely from another country. This number and its uses vary from country to country, but one thing remains the same: the IRS requires a valid foreign TIN for Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) to be considered complete.

Are you unable to give a foreign TIN?

If you cannot provide a foreign tax identifying number, you’re required by the IRS to complete an Explanation of Missing Foreign Tax Identifying Number form. There are several types of valid explanations you can provide, such as:

• “I am not legally required to obtain a foreign TIN.”
• “My country of permanent residence does not issue foreign TINs.”

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FAQs

Is an EIN the same as a tax ID?

Yes, an EIN is a type of tax ID number assigned by the IRS specifically to businesses for tax purposes.

How much does it cost to get a tax ID number from the IRS?

In most cases, there is no cost to apply for and obtain a tax identification number from the IRS. However, some states may charge a small fee for issuing state tax ID numbers.

What happens if I lose my tax ID number?

If you misplace or forget your tax ID number, there are a few ways to recover it, depending on the type of TIN. Individuals can find their SSN on their Social Security card, tax returns, W-2 forms, and other financial documents, such as bank statements and loan applications. Businesses can retrieve a misplaced EIN by checking their EIN confirmation letter, business tax returns, business bank account statements, or other records.

If these methods are unsuccessful, contact the Social Security Administration or the IRS Business and Specialty Tax Line for assistance.

Disclaimer: This article and all information in it is provided for general informational purposes only. It does not and is not intended to constitute legal or tax advice. You should consult with a qualified legal or tax professional for advice regarding any legal or tax matter and prior to acting (or refraining from acting) on the basis of any information provided on this website.