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There are many numbers that are used to identify ourselves and our corporations or LLCs, such as a Social Security number, driver's license number, passport number, DUNS number and EIN (Employer Identification Number).
Many business owners and employees wonder about the differences between the Federal Employer Tax ID number (EIN) and the individual taxpayer identification number (ITIN).
The Federal Tax ID Number, known as an EIN, is an identification number used by the IRS to administer tax laws. The Federal Tax ID Number is used to identify an entity to the IRS, banks and other businesses.
Think of this number as the social security number for a business. This number is typically needed to operate your business in the United States, do banking in the United States, hire employees and file taxes with the IRS.
Non-U.S. residents, please note that once you submit your EIN order, you will be required to provide a copy of the passport or government-issued ID for the person listed as the responsible party.
The individual taxpayer identification number (ITIN) is a tax number only available to certain non-U.S. residents and resident aliens and their spouses and dependents who are not able to obtain a social security number (SSN). ITINs always start with a "9" and are typically formatted like a Social Security number: 9xx-xx-xxxx.
The ITIN is needed by many non-U.S. residents who form a Delaware corporation or LLC. If there is a tax filing requirement with the IRS, an ITIN is needed.
For example, if a company has U.S. source income and profits or losses that flow through to the member or shareholder, owners typically need to obtain an ITIN in order to complete a tax filing with the IRS.
ITINs are issued regardless of immigration status because both resident and non-resident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
Do you need help getting your ITIN? You can obtain an ITIN Number by completing Form W-7 and mailing it to the IRS. Alternatively, you can contact one of the ITIN acceptance agents listed by the IRS for assistance. There are agents available within the U.S. as well many countries internationally.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
There are 16 comments left for EIN vs ITIN: What's the Difference?MOHAMME ZAYED said: Thursday, December 31, 2020
Hello, I am outside the United States and have not visited before. All I want is trying to understand how to open a Delaware LLC. My goals are not to resell in the United States. I did not understand what I should have in this regard. Do I need To ITIN or EINHBS Staff replied: Tuesday, January 5, 2021
You do not have to live in, or even visit, the state of Delaware in order to form a Delaware company. Other than residents of restricted countries (Cuba, Iran, North Korea and Syria), anyone can form a Delaware company and operate lawful business activities from anywhere in the world.
A SSN or ITIN is not a requirement to form the company with Delaware or to obtain the EIN from the IRS. This will explain in detail https://www.delawareinc.com/before-forming-your-company/delaware-company-formations-for-non-residents/Eddy said: Tuesday, December 22, 2020
I am not a USA citizen, so I report or filled taxes using an ITIN #. I want to start a SMLLC, I know I can get an EIN # since I have ITIN #. My question is how do I filled taxes for the EIN? whiting my personal taxes? Or do I filled it separately? Please helpHBS Staff replied: Monday, December 28, 2020
Unfortunately we cannot advise you on how to file your taxes. It is possible to file for your LLC on your personal returns, but we recommend you speak with an accountant to determine the best strategy for your specific situation.Nirav Patel said: Thursday, October 15, 2020
I am an Indian citizen and my partner is a US citizen. I want to open a partnership company [LLC] in Delaware, USA. Once our company will start in the USA, at that time I have to file my personal tax return in the USA and as I am an Indian citizen, so I have to submit that in India later on. So for that my questions are: 1. How to file tax in the USA without social security number? 2. Do I file K1 with ITIN? 3. What documents of mine are required to get ITIN number? List of my documents for Indian Citizen 4. Is personal bank account of mine mandatory in USA? 5. Is a USA visa required? [If yes, type of Visa] 6. Do I have to visit USA for that? 7. How much time whole process will take? waiting for your replyHBS Staff replied: Friday, October 16, 2020
Nirav, thank you for reaching out. Unfortunately, many of your questions we are not able to answer, as we cannot provide tax advice or provide support for setting up your bank account. What we can tell you is that there is no requirement to have a bank account in the US. You might want to contact a bank to discuss what you'll use the account for to make sure it's the right choice. As far as the ITIN, the information you'll need to provide can be found on IRS form W-7: https://www.irs.gov/pub/irs-pdf/fw7.pdfTahir said: Thursday, October 15, 2020
For a Non US or never visited US person, please guide me: I want to start an online selling business from my own country, in this case either LLC or Corporation, which is best for business benefits. I heard Mercury bank and Azlo for online banking, which one you recommend as more reliable. Please assist if I can take your service for both these assignments so?HBS Staff replied: Thursday, October 15, 2020
This article will help you compare LLCs and Corporations: https://www.delawareinc.com/corporation/corporation-vs-llc/
As we mentioned, we cannot advise on which is a better option for you, because it depends on your specific objectives and plans for the business. For example, LLCs are often a good choice for simple and flexible management. Corporations are typically preferred by clients who intend to sell equity ownership in their company. We highly recommend that you speak with an attorney if you are unsure which to choose. We are happy to help you create the company once you know which entity type you want.
We do not work directly with the banking platforms and cannot advise on which to choose. It would be best to contact both of them to understand their benefits and requirements for creating an account.Tahir said: Sunday, October 11, 2020
I am a non US resident, nor I have visited US in past. I want to create a company in US without visiting US, to start an online business. Please tell me whether LLC is the best option or the Incorporation Inc. company? Moreover, I don't have any physical address, nor anyone in US whose physical address I can provide in forming a company or business bank account. How I can create my company in such conditions. Please assist in this regardHBS Staff replied: Wednesday, October 14, 2020
As a non-resident, you can still create either an LLC or corporation. The choice depends on your objectives for the business so unfortunately we cannot tell you which is the right choice for you. Most US banks will require you to visit in person in order to open an account. Some of our international clients have had success with Merucy Bank, so you might want to check with them.