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.
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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?
ALI said: Sunday, June 14, 2020I am an alien resident in the US, i am eligible stay in US but still don't have SSN, i made a personal company and have now EIN, can i use my company to work as subcontractor in the field of transportation and construction or other fields or not.
HBS Staff replied: Monday, June 15, 2020With a Delaware company, you can operate legal business activities anywhere in the world, including contracting with other parties. However, we cannot advise on other factors, such as your immigration status, that may affect your eligibility to engage in that particular relationship.
dennis shostle said: Friday, May 1, 2020I just purchased a cafe I geeked out for a EIN but don’t know if I needed a TIN instead. Could you please let me know what I need
HBS Staff replied: Monday, May 4, 2020A TIN (Tax Identification Number) is just another term for EIN. An ITIN (Individual Taxpayer Identification Number) is typically used by individuals who do not have a U.S. social security number. Please let us know if you have additional questions.
Nery Garcia said: Monday, June 10, 2019I create an LLC with you, and you helped me get my EIN, I went to different branchs of diffrent banks in the Us trying to open a business bank account but they told me I cannot open a business bank account because I am non us resident. wells fargo asked me for the ITIN, my question is: I am already paying taxes to delaware and the IRS with my EIN, if I get the ITIN, do I have to pay another tax for that? thanks for your answer
HBS Staff replied: Wednesday, June 12, 2019Nery, for this question we recommend you speak with a tax professional. Unfortunately, we do not provide service for ITIN and are unable to answer your question.
Darlene Ellen Smith said: Friday, April 26, 2019I applied for an EIN number and I received it online yesterday and printed it out however I forgot to apply for it as LLC. What can I do to correct it so it will be under LLC.
HBS Staff replied: Monday, April 29, 2019
[Update: Please contact the IRS directly if you need to make a change to the document you filed with them already.]
Darlene, typically the first step of the process is to form the LLC then build off it from there. If you have obtained the EIN number already, we can help to form the LLC, we would just need this completed www.delawareinc.com/order, if the name is available to be formed we will file your new LLC right away!
AMAZOKAD said: Saturday, March 2, 2019
Hello I am not an American resident. I created an offshore LLC company. I am the owner and I have my EIN. I want to open a bank account in the United States without moving. if I understand correctly the bank will ask me next to my EIN the ITIN. My question is this: since I have the EIN it means that the IRS has already created an ITIN for me just enough to ask. Or do I have to fill out another form specifically for the ITIN? Cdt OKAD MARKET
HBS Staff replied: Monday, March 4, 2019The ITIN is not a number that is automatically generated when the EIN number is obtained. A number of our clients have used Seaford Management LLC to obtain their ITIN. Seaford Management LLC is a Certifying Acceptance Agent with the IRS, and they can file your application to obtain an ITIN number. If you have any questions about the ITIN, or would like to get an ITIN, you can email Seaford Management LLC or call them at (302) 990-9003.