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?
Andreina said: Tuesday, September 25, 2018This is more of a question? I have an ITIN number already... I need to know if I'm able to use it to apply for an apartment or maybe purchase a car... Or is it only for taxes? And if I'm not working.. how do I go about filing.. or may the pertim staying with use it on there taxes? So many more questions not enough time.. would love your help and advice...
HBS Staff replied: Thursday, September 27, 2018We can't provide advice on how to use your ITIN except that any vendor or agent requesting a tax ID will be able to tell you if the ITIN is sufficient or if they need a personal Tax ID. We encourage you to check with a tax professional if you have specific questions about where you can use your ITIN.
Katia said: Saturday, May 26, 2018Hi!! If i want to form a new LLC, and im not a US resident. Do I need to Get an ITIN number to start the LLC? I mean the ITIN Is required before or as a part of the files needed to obtain the EIN and Open a business Bank acount? And, do you could help us un the end-to-end process to start a new LLC? Do You have spanish support? Thanks
HBS Staff replied: Tuesday, May 29, 2018We can best answer those questions for you if you call 1-800-345-2677 during business hours 9-5 EST. Ask to speak to Alex Oliveras, as he speaks Spanish.
Amaia said: Friday, March 9, 2018Hello, My friend has an ITIN number only. For tax purposes he needs to know is his ITIN has to go on the SSN field or on the FEIN field? I have been asking for everywhere, but no answer. Even the IRS info does not address this issue. Maybe you know...I hope! Thank you.
HBS Staff replied: Monday, March 12, 2018Which form are you referring to? It is unclear in your question.
Emmanuel Darkadakis said: Tuesday, January 17, 2017Hi All, I think about forming an LLC in Delaware to operate as a holding company for one or more businesses located & working in EU- no transactions in USA or with USA-based firms some have EU affiliates however. My questions are: a do I need an ITIN or EIN there will be no operations in USA of any kind?, b can you assist in opening a bank account in USA or UAE? c will I have to pay taxes for the LLC or myself in the US?
HBS Staff replied: Wednesday, January 18, 2017We would be happy to assist you in the forming of a Delaware LLC. A company is often only required to get an EIN if the company is operating lawful business activities in the U.S., opening a U.S. bank account or hiring U.S. citizens for employment. Every bank and banker is different as far as what they require to open a bank account.
At this time, we cannot assist you with opening a bank account. If you’re looking to open a U.S. bank account, the bank will require you to go into the bank in person, with a copy of your company's Certificate of Formation and Federal Tax ID Number (EIN). Generally, a Non U.S. citizen with a non U.S. source of income does not pay federal income tax.