Are an EIN and an ITIN the Same Tax ID Number?

An Employer Identification Number (EIN) and an Individual Taxpayer Identification Number (ITIN) are not the same. Both are nine-digit tax identification numbers issued by the Internal Revenue Service (IRS) for processing tax returns and other documents. They are formatted similarly, but they serve distinct purposes and are assigned to entirely different types of taxpayers. An EIN is for business entities, while an ITIN is for specific individuals.

The Employer Identification Number Explained

An Employer Identification Number, often called an EIN, is a federal tax ID used to identify a business entity. Think of it as a Social Security Number, but for a business. The IRS assigns these unique nine-digit numbers, formatted as XX-XXXXXXX, to track the tax reporting for various organizations. Any business that operates as a corporation or a partnership is required to obtain one.

Sole proprietorships generally need an EIN if they pay employees or file excise tax returns. Trusts, estates of decedents, and nonprofit organizations also must have an EIN for tax administration purposes. A business entity applies for this number using Form SS-4, Application for Employer Identification Number. Beyond tax filings, an EIN is also required to open a business bank account, apply for business licenses, and manage employee payroll.

The Individual Taxpayer Identification Number Explained

An Individual Taxpayer Identification Number, or ITIN, is a tax processing number issued to certain individuals. It is for people who are required to have a U.S. taxpayer ID for federal tax purposes but who do not have and are not eligible to obtain a Social Security Number (SSN). The ITIN is formatted like an SSN (XXX-XX-XXXX) but always begins with the number 9.

The primary users of ITINs are nonresident and resident aliens who have a U.S. tax filing or reporting requirement. It may also be issued to the spouses or dependents of U.S. citizens or residents if they cannot get an SSN. To get an ITIN, an individual must submit Form W-7, Application for IRS Individual Taxpayer Identification Number, and attach a valid federal income tax return. An ITIN is for tax reporting only; it does not authorize work in the U.S. or provide eligibility for Social Security benefits.

When to Use an EIN vs an ITIN

Choosing the correct number depends entirely on the taxpayer’s status and needs. For instance, if you are starting a new limited liability company (LLC) that will have employees, you must apply for an EIN. This number will be used on all business-related tax forms and for setting up the company’s payroll system. The business entity itself is the taxpayer in this scenario.

A different situation involves a foreign national who earns income in the U.S. that must be reported on a tax return but is not eligible for an SSN. This individual would need to apply for an ITIN to file their personal income tax return. The ITIN allows them to meet their personal tax obligations.