EIN vs ITIN: What's the Difference?
Two of the most commonly confused identification numbers for new business owners are the ITIN and the EIN. While they may sound similar and are both issued by the Internal Revenue Service (IRS), they play very different roles in the U.S. tax system.
Are an ITIN and an EIN the same?
The short answer is no. They serve different purposes and apply to different levels of tax reporting; one is tied to an individual, while the other is tied to a business. Having one does not replace or eliminate the need for the other, and it’s common for a business owner to need both.
Now, let’s try to discern the difference between these two numbers.
What is an EIN?
An Employer Identification Number (EIN), also called a Federal Tax ID Number, is a unique nine-digit number assigned by the IRS to identify a business for tax purposes. Think of this number as the social security number for a business. The EIN is typically needed to do banking, hire employees, file taxes, and generally operate your business in the United States.
Technically, not every business needs an EIN, but it’s typically required for corporations, partnerships, LLCs with multiple members, and any business that hires employees. Even sole proprietors may need one in certain situations.
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What is an ITIN?
The individual taxpayer identification number (ITIN) is a tax number only available to certain non-U.S. residents, resident aliens, 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 used for federal tax reporting, allowing individuals to file U.S. tax returns and pay taxes.
Forming a Delaware corporation or LLC as a non-resident is perfectly acceptable when the foreign individual or group applies for an ITIN. 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.
Which Do I Need?
Whether you need an EIN or an ITIN depends on, well, who you are and what you’re doing in the U.S. tax system. Here’s a quick breakdown that will help you determine which will apply to you:
You need an EIN if:
- You are forming or operating a business in the United States
- Your business is an LLC, partnership, or corporation
- You plan to hire employees
- You need to open a U.S. business bank account
- You must file business tax returns
You need an ITIN if:
- You are an individual who must file U.S. taxes
- You are not eligible for a Social Security number (SSN)
- You earn U.S.-source income, own a U.S. business, or must file a U.S. tax return
Just remember that an EIN identifies a business entity, not an individual, and is issued by the IRS. An ITIN identifies you personally for tax purposes and does not represent a business.
EIN vs. ITIN for Non-U.S. Residents
You can (and often must) have both an EIN and an ITIN if you are a foreign individual operating a business in the United States. While they are both tax identification numbers, they serve entirely different purposes. You can think of the ITIN as your personal ID and the EIN as your business’s ID.
For example, if you decide to form a Delaware LLC as a non-resident, the company will need an EIN to function. When the LLC starts to turn a profit, you’ll need to report that income on a personal U.S. tax return, for which you will need an ITIN. Similarly, if you decide to hire employees for your U.S. business, you are required to get an EIN for payroll purposes, while still using your ITIN for your own personal filings.
How to Apply
Both the EIN and the ITIN are issued by the IRS.
For an EIN, you can apply directly through the IRS website, via fax, or through the mail. When applying online, the process is relatively quick. After you complete the online EIN application, you’ll receive your EIN immediately after submitting. All you’ll need is your business name, the Responsible Party’s name and SSN/ITIN, and your business address. You can also apply for an EIN by submitting Form SS-4 by fax. This process usually takes several days, but it is useful if you can’t use the online system. You can also mail Form SS-4 to the IRS, but this process will take several weeks.
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 as in many countries internationally.
EIN & ITIN FAQs
What is a 'responsible party', as required on the SS-4 form?
The responsible party must be an individual. For a Corporation, the responsible party is an officer of the company, and for an LLC, the responsible party is an owner or member of the company.
As my registered agent, is Harvard Business Services’ address the address of my company?
No, the address of your company is not Harvard Business Services’ address. The IRS requires a physical business address for your company, even if it is based outside of Delaware and the U.S. Also, be prepared to provide the IRS with a brief description of the nature of your business. You have up to 50 characters including spaces for this field.
Can I use my EIN instead of an ITIN to file personal taxes?
No. An EIN is strictly for business entities. If you have a personal tax filing requirement, such as reporting your share of an LLC's profits, you must use your ITIN or SSN. Using an EIN on a personal tax form will result in a rejected return.
Are EINs and ITINs public?
The IRS does not maintain a public database for either number. However, EINs often become public through business activities. Non-profits and publicly traded companies will often make their EINs public through certain filings and tax returns. On the other hand, your ITIN should remain strictly confidential. There is no public registry for ITINs, and the number should only be known to you and the IRS.
Get answers for all your business needs
Not sure what’s right for your company? Speak directly with our specialists and get clarity before you make your next move.
Talk to an expert*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.
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There are 19 comments left for EIN vs ITIN: What's the Difference?
Abdullah Rasheed Khan said: Sunday, October 17, 2021Hi Thanks for this informative article. Can you please help me to understand. If I open an LLC company in DELWARE as a foreigner. Do i have to obtain an ITIN also ? I have a Single Member LLC. If I use any payment gateway on my company like Stripe or paypal, Do they ask me ITIN number also ? Or only EIN number is enough ? Please advise.
HBS Staff replied: Monday, October 18, 2021Hi Abdullah, While we can help form your Delaware LLC, we cannot provide tax or accounting advice to the operational side of your business. It would be best to contact an accountant or tax attorney for your next steps after forming your LLC.
Sabrina said: Thursday, June 24, 2021Although I'm a single member LLC, the banks insist on me having an EIN in order to open a business bank account. Any suggestions? Secondly, I've been wondering what's the point of having a LLC if I have to use my personal SSN?
HBS Staff replied: Thursday, June 24, 2021Hi Sabrina, banks often require EINs to identify your business without using your personal SSN. This way, if someone asks you for your company identifier, you are not supplying your SSN to anyone who inquires. The LLC protects you from personal liability.
best college paper writing service said: Monday, January 25, 2021Nice post. I learn something new and challenging on blogs I stumbleupon on a daily basis. It's always useful to read contet from other writers and use something from other sites.
HBS Staff replied: Friday, January 29, 2021Glad to hear you learn something new and found our article to be informative.
MOHAMME ZAYED said: Thursday, December 31, 2020Hello, 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 EIN
HBS Staff replied: Tuesday, January 5, 2021You 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, 2020I 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 help
HBS Staff replied: Monday, December 28, 2020Unfortunately 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.