Learn About Getting a Tax ID Number

What is a Tax ID Number and Why You Might Need One

A Tax Identification Number (TIN) is a nine-digit code assigned by the Internal Revenue Service (IRS) to identify individuals and businesses for tax purposes. The IRS uses this number to track income, tax payments, and filing history. There are several types of tax ID numbers, and understanding which one applies to your situation is the first step in learning about the tax system.

The most common type is the Social Security Number (SSN), which the Social Security Administration issues to U.S. citizens and certain residents. If you already have an SSN, you already have a TIN. However, if you don't have an SSN or need a separate number for business purposes, you would obtain an Employer Identification Number (EIN), also called a Federal Employer Identification Number (FEIN).

According to IRS data, approximately 33 million EINs are currently active in the United States, reflecting the large number of businesses, nonprofits, trusts, and other entities operating in the country. Many people need a TIN beyond their Social Security Number when they start a business, form a partnership, create a trust, or operate as a sole proprietor who wants to separate personal and business finances.

You might also encounter an Individual Taxpayer Identification Number (ITIN) if you're a non-resident alien or someone without an SSN who still needs to file taxes. Some people use ITINs specifically to file tax returns or claim certain credits. Understanding which type of number you need depends on your citizenship status, your work situation, and whether you operate a business entity.

Practical Takeaway: Before obtaining a new tax ID number, determine which type you need by reviewing your current situation. If you're a U.S. citizen with an SSN, you likely already have a TIN. If you're starting a business or creating a formal entity, research whether an EIN is necessary for your specific circumstances.

Types of Tax ID Numbers and When Each One Applies

The IRS recognizes several different categories of tax identification numbers, each designed for specific situations. Learning about each type helps you understand which one might apply to your circumstances. The main types are Social Security Numbers (SSN), Employer Identification Numbers (EIN), Individual Taxpayer Identification Numbers (ITIN), and Adoption Taxpayer Identification Numbers (ATIN).

A Social Security Number is issued by the Social Security Administration to U.S. citizens, permanent residents, and temporary residents with work authorization. This nine-digit number serves as your primary tax ID for most personal tax situations. When you file individual income tax returns, report wages, or claim benefits, you use your SSN. The SSA issues approximately 5.5 million new SSNs annually, primarily to newborns and immigrants obtaining work authorization.

An Employer Identification Number is issued by the IRS and is used to identify businesses, nonprofits, trusts, estates, and other entities. Unlike an SSN, which is personal, an EIN is tied to the organization itself, not to an individual owner. You might need an EIN if you operate a business with employees, form a corporation or partnership, establish a trust, operate a nonprofit organization, or run a sole proprietorship that chooses to be taxed as a business entity. The IRS assigns EINs at no cost.

An Individual Taxpayer Identification Number is issued to non-resident aliens and other individuals who don't have an SSN but need to file taxes or claim certain credits. An ITIN has the same format as an SSN (nine digits) but begins with the number 9. Some individuals use an ITIN to file tax returns and claim refundable tax credits like the Earned Income Tax Credit (EITC). According to IRS reports, approximately 16 million ITINs are currently in use.

An Adoption Taxpayer Identification Number is a temporary number issued to adoptive parents before a child's SSN is obtained. Once the adoption is finalized and an SSN is issued, the ATIN is no longer used. This number allows adoptive parents to claim the child as a dependent and file tax returns while the adoption process is ongoing.

Practical Takeaway: Create a simple chart for yourself listing your personal or business situation and cross-reference it with each TIN type. This exercise clarifies which identification number category fits your circumstances and helps you avoid requesting an unnecessary number.

How to Obtain an Employer Identification Number (EIN)

If you determine that you need an EIN for your business or organization, the IRS provides several methods for obtaining one. The process is straightforward, and there is no cost to request an EIN. Understanding your options and the steps involved can help you move forward with this process efficiently.

The fastest way to obtain an EIN is through the IRS website using the online application system. You can fill out the application on irs.gov and receive your EIN immediately upon submission if you apply during business hours (Monday through Friday, 7 a.m. to 10 p.m. Eastern Time). The online system asks questions about your business structure, business address, business activities, and the person responsible for the business. You'll need to have information about your business ready before you begin, including the business name, business address, and the names and Social Security Numbers of owners or responsible parties.

If you prefer to mail your application, you can complete Form SS-4 (Application for an Employer Identification Number) and send it to the appropriate IRS address for your region. Mailed applications typically take four weeks to process. You'll receive your EIN by mail once the IRS processes your form. This method works well if you don't have internet access or prefer a paper-based approach.

You can also request an EIN by telephone by calling the IRS Business and Specialty Tax Line at 1-800-829-4933. You'll need to speak with an IRS representative and provide the same information you would include on Form SS-4. Phone applications are processed during business hours, and you'll receive your number immediately. This method is useful if you prefer direct communication with an IRS representative.

A third-party representative, such as an accountant or attorney, can also request an EIN on your behalf. They would use Form SS-4 and submit it by mail or phone with a power of attorney document authorizing them to act as your representative. This option is helpful if you have complex business arrangements or prefer to have a professional handle the process.

When you request an EIN, you'll need to provide specific information: the legal name of your business, the business mailing address, the physical business location (if different), the business start date, the type of business entity (sole proprietorship, partnership, corporation, nonprofit, trust, etc.), the primary business activity, and the names and SSNs of owners. If your business has employees, you'll indicate that as well. Once you receive your EIN, keep it in a secure location and use it on all business tax documents, employment records, and bank accounts.

Practical Takeaway: Gather all necessary business information before applying for an EIN, including your business structure, address, and ownership details. Choose the application method that works best for your situation—online is fastest, phone is interactive, and mail works if you prefer paper documents.

Understanding ITINs for Non-Citizens and Special Situations

An Individual Taxpayer Identification Number serves a specific purpose in the tax system for individuals who don't have a Social Security Number but still need to file taxes or claim certain tax credits. Learning about ITINs helps non-citizens and others in unique situations understand how they can participate in the tax system.

The IRS issues ITINs to individuals who are not eligible for an SSN but have a U.S. tax filing requirement. Common situations include non-resident aliens with U.S. income, foreign students studying in the U.S., visa holders working in the country, undocumented immigrants who want to file tax returns and claim refundable credits, and dependents of U.S. citizens who don't have SSNs. An ITIN is a nine-digit number formatted like an SSN but always begins with 9 in the first digit.

One significant benefit of obtaining an ITIN is the opportunity to claim refundable tax credits. Many non-citizens with ITINs report income and file tax returns to claim the Earned Income Tax Credit (EITC), Child Tax Credit, or other refundable credits that result in tax refunds.