Key Takeaways

  • A Tax ID Number (TIN) is a broad term that includes several types of identification numbers used for tax purposes, including EINs, SSNs, and ITINs.
  • An Employer Identification Number (EIN) is one specific type of TIN used exclusively by businesses and entities.
  • EINs are used for hiring employees, opening business accounts, and filing business tax returns, while other TINs serve individual or specialized roles.
  • EINs and TINs are issued by the IRS but serve different purposes depending on entity type.
  • Sole proprietors without employees can often use their SSN instead of obtaining an EIN.
  • Entities may need separate EINs for state-level and federal-level identification.

Is EIN the same as a Tax ID? An employer ID number (EIN), used by businesses for tax purposes, is just one type of tax ID number (TIN) that can be assigned by the Internal Revenue Service (IRS) for federal income tax purposes.

What is a Tax ID Number?

A tax ID number is a generic term for a nine-digit identification number that the Internal Revenue Service uses to identify and track payments to individuals and businesses for federal income tax purposes. This number is entered on a tax return when reporting income.

Some types of tax ID numbers include:

  • Employer ID Number: A tax identification number for most businesses.
  • Social Security Numbers (SSNs): The most common identifier for individuals.
  • Individual Taxpayer Identification Numbers (ITINs): Used for individuals who are not eligible for a Social Security Number or an Employer ID Number, such as non-U.S. residents and resident aliens who cannot obtain a SSN.

What is an Employer ID Number?

An employer ID number is needed for most businesses to file federal income taxes. The IRS uses the EIN to identify those businesses with certain tax obligations, such as limited liability companies (LLC), partnerships and corporations.

All businesses with employees must get an EIN through the IRS. There are several other factors that determine whether a business needs an EIN, including:

  • Open an account requiring an EIN for banking or a line of credit
  • Purchase or inheritance of a business by a new owner who will be running it as sole proprietor
  • Change in the ownership of a business, such as sole proprietorship, partnership, or corporation
  • Form or create a trust, pension plan, corporation, partnership, or LLC
  • Represent an estate that takes over a business following the death of a sole proprietor

Businesses without employees, such as sole-owner LLCs who do not file pension or excise tax returns, are not required to obtain an EIN. These single-member businesses can simply use the owner's Social Security Number to file a tax return.

Depending where the business is located, a state-based EIN might be needed to file state income taxes. This number is different from the one used for federal income tax. For a person discussing state and federal EINs, a federal employer ID number (FEIN) is simply another way of describing the EIN used for filing federal income tax returns as described in this article.

What Is the Difference Between a TIN and an EIN?

The tax ID number and the employee ID number are similar, but their differences include:

  • An EIN is one of several types of tax ID numbers.
  • An EIN is assigned to businesses only, not individuals.

Why EINs and TINs Are Often Confused

Many people use the terms EIN and Tax ID Number (TIN) interchangeably, which can create confusion. The key reason for this mix-up is that an EIN is a type of TIN. While all EINs are TINs, not all TINs are EINs.

TINs include a range of identifiers:

  • Social Security Numbers (SSNs) – For individual taxpayers.
  • Individual Taxpayer Identification Numbers (ITINs) – For certain nonresidents and others not eligible for SSNs.
  • Adoption Taxpayer Identification Numbers (ATINs) – For children in the process of adoption.
  • Preparer Tax Identification Numbers (PTINs) – For paid tax return preparers.
  • Employer Identification Numbers (EINs) – For business entities.

Understanding that EINs are a subset of TINs helps clarify their respective roles: EINs apply to business tax reporting, while TINs encompass broader identification uses for both individuals and entities​​.

Getting a Tax ID Number

Online submission is the fastest and preferred way to request a tax ID number. This service is available for all businesses whose main office or legal residence is within the U.S.

  1. Visit the IRS website for requesting a tax ID/EIN
  2. Select the most appropriate entity type
  3. Complete the online version of Form SS-4
  4. Submit the completed form

If submitted online during business hours, you will typically receive your tax ID number within one business day. If you are unable to submit the request online, you can also:

  • Call the toll-free number 1-800-829-4933
  • Download the IRS Form SS-4 and mail or fax it to the IRS
  • Complete the form directly on the IRS website

How to Know Which Tax ID Number You Need

Choosing the right TIN depends on your status and purpose:

  • Individuals use SSNs or ITINs for personal income tax filing.
  • Sole proprietors may use their SSN, but an EIN is often preferred for professional credibility and privacy.
  • Businesses with employees must obtain an EIN.
  • Foreign individuals or entities needing to pay U.S. taxes typically require an ITIN or EIN, depending on business structure.

If you’re unsure which applies to your situation, consulting a tax professional or legal advisor is recommended. You can also find an attorney on UpCounsel to help guide you through this process.

Common Situations Requiring an EIN

An EIN is required in various scenarios beyond just hiring employees. Businesses and organizations typically need an EIN if they:

  • Form a partnership, corporation, or multi-member LLC
  • Operate as a non-profit organization
  • Withhold taxes on income paid to a nonresident alien
  • Have a Keogh plan
  • Are involved in trusts, estates, or real estate mortgage investment conduits

Even sole proprietors might need an EIN if they want to separate personal and business finances or are required by a bank or lender. Understanding when an EIN is legally required versus when it is optional can help ensure compliance and smooth operations​.

Frequently Asked Questions

  1. Is an EIN the same as a TIN?
    No. An EIN is one type of Tax Identification Number (TIN) used specifically for businesses. Other TINs include SSNs, ITINs, and more.
  2. Can a sole proprietor use an SSN instead of an EIN?
    Yes, sole proprietors without employees may use their SSN for tax purposes. However, an EIN is recommended to protect personal information and maintain business professionalism.
  3. Is an EIN required for all LLCs?
    Not necessarily. A single-member LLC with no employees and no excise tax obligations may not need an EIN. Multi-member LLCs and those with employees do require one.
  4. Do I need a separate EIN for state taxes?
    In some states, you may need a state-specific tax ID in addition to your federal EIN. Check with your state’s tax agency.
  5. Can individuals apply for an EIN?
    Yes, individuals can apply for an EIN if they operate a business or meet criteria requiring one (e.g., hiring employees, forming a trust).

If you need help with tax ID numbers or employer ID numbers, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.