SSN vs EIN vs TIN - What's the Difference?

This content has been reviewed and edited by an Investment Advisor Representative working for Global Predictions, an SEC-registered Investment Advisor.

If you've been navigating the world of business or taxes in the United States, you may have come across terms like SSN, EIN and TIN. Understanding what these acronyms mean and how they differ is useful for making informed decisions about your financial and business activities. This guide clarifies the purpose of each, their differences, and when you might need one or both.

What is a TIN?

A Taxpayer Identification Number (TIN) is an umbrella term that includes several types of identification numbers the IRS uses to track individuals and businesses for tax purposes. The most common types of TINs include:

• Social Security Number (SSN): Used by U.S. citizens and resident individuals for tax filings.
• Employer Identification Number (EIN): Used by businesses for tax reporting and other official purposes (details below).
• Individual Taxpayer Identification Number (ITIN): Issued to individuals who must pay taxes but do not qualify for an SSN, such as certain non-resident aliens.

TINs are required whenever someone files a tax return, claims tax benefits, or must verify their residency for tax purposes.

What is an SSN?

A Social Security Number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and some temporary residents. It serves as a unique identifier for individuals primarily in tax filings and social security benefits. Individuals use their SSN to file taxes, apply for credit, and participate in government benefits programs.

What is an EIN?

An Employer Identification Number (EIN) is a specific type of TIN that the IRS issues to businesses, trusts, estates, and other entities for tax purposes. It functions like a Social Security Number but is designed for organizations rather than individuals. Businesses need an EIN to file tax returns, hire employees, open bank accounts, and manage various business-related financial matters.

Even if a business does not have employees, most corporations, LLCs, and partnerships are required to obtain an EIN. You can apply for an EIN quickly through the IRS website.

When Might You Need an EIN?

Individuals typically use SSN or ITIN for personal taxes, whereas businesses use an EIN. Some situations in which an EIN is required include:

• Hiring Employees: Any business that hires employees must have an EIN.
• Opening a Business Bank Account: Most banks require an EIN to establish a business account.
• Filing Business Taxes: Companies use their EIN to report earnings, manage payroll, and submit corporate tax returns.
• Forming a Corporation or Partnership: LLCs, corporations, and partnerships often require an EIN, even if they do not have employees.

Key Differences Between EIN and TIN

The primary difference between an EIN and a TIN lies in their scope. A TIN is a broad term that includes various forms of taxpayer identification, whereas an EIN is a specific type of TIN used exclusively by businesses.

How to Apply for a TIN, SSN, or EIN

Applying for these identification numbers is a straightforward process:

• SSN: If you're applying for an SSN, this is done through the Social Security Administration.
• TIN (ITIN): If you need an ITIN, you can apply through the IRS using Form W-7, along with proof of identity.
• EIN: You can apply for an EIN directly through the IRS website. The process is typically quick, and in most cases, you’ll receive your EIN immediately after applying.