What is Tax Identification Number (TIN) ?

A Tax Identification Number (TIN) is a distinctive code issued by a tax authority to an individual, business, or entity to facilitate taxation processes. In the United States and various other nations, this nine-digit identifier plays a crucial role in identifying taxpayers, facilitating accurate tax reporting, and is indispensable for tasks such as filing tax returns, availing benefits, and engaging in other activities related to taxation.

Types of TINs

The U.S. issues several types of identification numbers, all containing exactly nine digits:

• Social Security Number (SSN): Issued to American citizens, permanent residents, and temporary residents under certain visa categories. It's the most common type of TIN.
• Individual Taxpayer Identification Number (ITIN): Issued to non-resident aliens and others who have tax filing requirements but are not eligible for an SSN.
• Employer Identification Number (EIN): Also known as a Federal Employer Identification Number (FEIN), it's used by employers, corporations, partnerships, non-profits, and certain other entities.
• Adoption Taxpayer Identification Number (ATIN): Temporary numbers for children in the process of being adopted who can't get an SSN in time for the adoptive parents to file their tax return.
• Preparer Tax Identification Number (PTIN): Used by tax preparers who must put this number on returns they prepare.

What is the Social Security Number (SSN)?

The SSN is a nine-digit number assigned to U.S. citizens, permanent residents, and certain non-citizens who are authorized to work. It's necessary for employment in the U.S. and is issued by the Social Security Administration (SSA).

What is the Individual Taxpayer Identification Number (ITIN)?

The ITIN is for individuals who need a U.S. taxpayer identification number but aren't eligible to obtain an SSN. This includes certain non-resident aliens and their dependents. ITINs are used for tax processing purposes and are issued by the Internal Revenue Service (IRS).

How to get an Individual Taxpayer Identification Number (ITIN)?

To apply for an ITIN, complete IRS Form W-7, "Application for IRS Individual Taxpayer Identification Number". Attach a federal income tax return and supporting documentation like a passport copy. Acceptance agents can facilitate the process.

What is the Employer Identification Number (EIN)?

The EIN is used by entities such as employers, corporations, partnerships, and non-profits. It's required for tax filing and reporting purposes. You can obtain an EIN by submitting Form SS-4 to the IRS.

SSN vs EIN

While businesses, particularly corporations, need an EIN, sole proprietors can use their SSN until they hire employees or meet other conditions requiring an EIN.

US Tax Identification Numbers for Non-US Citizens

Non-US citizens might need a U.S. tax ID for various reasons, such as owning a business in the U.S., earning income from U.S. property, or spending a significant amount of time in the U.S. They might need an SSN or ITIN depending on their situation.

Other US TINs: PTIN and ATIN

• PTIN: Required for third-party tax preparers. Issued by the IRS and necessary for any professional preparing or assisting in preparing federal tax returns.
• ATIN: Assigned to children in the adoption process when an SSN cannot be obtained in time for tax filing purposes.

Importance of TINs

TINs are crucial for managing and complying with tax obligations, receiving government services, and ensuring proper tax reporting and withholding. They are essential identifiers for individuals and entities within the tax system.