EIN vs ITIN: What's the Difference?

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).

Two of these numbers, the Federal Employer Tax ID number (EIN) and the individual taxpayer identification number (ITIN) are central to the formation process for your Delaware business. Let's dive into the key difference between an EIN and an ITIN.

What Is an EIN?

The Federal Tax ID Number, known as an EIN, is an identification number used by the IRS to administer tax laws. Employer Identification Numbers are used to identify an entity to the IRS, banks and other businesses.

Think of this number as the social security number for a business. The EIN 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.

A couple commonly asked questions regarding the EIN application:

What is a 'responsible party', as required on the ss4 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?

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.

We can help you obtain an EIN for an existing company or form a Delaware company and obtain an EIN.

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.

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.

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.

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.

Make sure you know the difference between an EIN and an ITIN before you form your next corporation.

Next: Tax IDs for Non-U.S. Citizens