Is EIN Same as Tax ID: Everything You Need to Know
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. 3 min read
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.
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.
- Visit the IRS website for requesting a tax ID/EIN
- Select the most appropriate entity type
- Complete the online version of Form SS-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
Frequently Asked Questions
Do I need an employer ID number?
An EIN is required for a business that:
- Has employees
- Opens an account that requires an EIN for banking or a line of credit
- Is purchased or inherited by someone who will be running it as a sole proprietor
- Makes a change in ownership, such as sole proprietorship, partnership, or corporation
- Forms or creates a trust, pension plan, corporation, partnership, or LLC
- Is represented by an estate that takes over a business following the death of a sole proprietor.
Are there different methods for registering for an EIN?
Yes. The fastest and most preferred method to apply for a new EIN number is online, but you can also apply on the phone, via fax, and through the mail.
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.