Reviews 4,000+ Verified REVIEWS
Services
Pricing plans
Compare all plans
Tax Guide
WhatsApp
Services
Pricing plans
Compare all plans
Tax Guide
Articles
All articles

What is a Tax Identification Number (TIN)?

What is a Tax Identification Number (TIN)?
Ines Zemelman, EA
01 December 2022

You must’ve been asked to provide your tax identification number on multiple occasions. But what exactly is a TIN number that your bank, state agencies, and tax authorities keep asking you to provide?

The advent of computer science and information systems led to the development of unique identifiers for all the residents of planet earth. So,

A taxpayer identification number (TIN) is a unique nine-digit number used to identify an individual, business, or other entity in tax returns and other documents filed with the Internal Revenue Service (IRS). It is issued either by the Social Security Administration (SSA) or by the IRS.

To put it simply - TIN is a unique set of numbers used by government authorities to keep track of their citizens, permanent residents, temporary visitors, etc.

What Is The Purpose Of The Tax Identification Number (TIN)?

The state agency approves and assigns TIN to individuals and corporate applicants. Alternatively known as a tax identification number the TIN must be included in tax-related documents.

So what can a TIN number be used for? They are used for employment, taxation, health care, and other government-related functions.

Your TIN will be required when:

a) Applying for credit

Banks and financial institutions require social security numbers for the loan approval process. The credit bureaus gather individuals' credit information and sell it to lenders, so they can make a decision on whether or not to grant loans.

These unique identifiers also facilitate credit reporting agencies to compile individuals' and businesses' credit reports that contain their historical credit information including their credit score.

b) Applying for employment

When employers decide to hire employees they need to ensure whether or not the potential candidate is authorized to work in the US. The employer gets their social security number and contacts the issuing agencies to verify their status.

c) Filing tax return or claiming treaty benefit

A TIN must be furnished on returns, statements, and other tax-related documents. The taxation authority issues a Unique ID to the filer which they use to file taxes with the IRS.

d) (for Expats) Furnishing forms W-9/W-8

Often, expats encounter a request for a TIN when their bank or online marketplace asks to furnish Forms W-9/W-8 and provide their TIN (aka US tax ID).

What Are The Types Of Tax Identification Numbers

Any government-provided number that can be used in the US as a unique identifier when interacting with the IRS is a TIN, though none of them are referred to exclusively as a Taxpayer Identification Number (TIN). A TIN may be:

  • Social Security number "SSN"
  • Employer Identification Number "EIN"
  • Individual Taxpayer Identification Number "ITIN"
  • Taxpayer Identification Number for Pending U.S. Adoptions "ATIN"
  • Preparer Taxpayer Identification Number "PTIN"

So, let’s take a closer look briefly at each of these various types of TINs below.

Social Security Number (SSN)

What Is It?

Individuals, who are US citizens or permanent and temporary residents are assigned the 9-digit SSN by the social security administration. The SSN makes an individual eligible to apply for employment within the US & to claim social security benefits along with other government facilities.

How To Apply For SSN?

Fill in the Form SS-5 to apply for social security card and submit evidence of your:

  • identity
  • age
  • U.S. citizenship or lawful alien status

Important!

To prevent a fraudster from stealing your unique identifier and misusing it, reveal your SSN only when required. Generally, you will be asked for SSNs by the IRS, your employer, and lenders.

Employer Identification Numbers (EIN)

What Is It?

EIN, alternatively known as a Federal tax identification number, is issued by the IRS to identify a business entity. A business, structured as a partnership, corporation & multi-member LLC, that employs people, and withholds taxes on income, must apply for EIN.

How To Apply For EIN?

To get your 9-digit EIN you need to submit Form SS-4, either online, by mail, or by fax.

Important!

If you apply online you will receive EIN immediately.

Individual Taxpayer Identification Number (ITIN)

What Is It?

IRS issues the 9-digit tax processing number i.e ITIN to individuals who are required to have a US TIN but are not eligible to get SSN. These individuals can be non-resident & resident aliens, their spouses & their dependents who must have a filing requirement and file a valid federal income tax return unless they meet an exception.

How To Apply For ITIN?

Fill out the IRS Form W-7 and supply a federal income tax return unless you meet the exception. Prove your foreign alien status and identity.

Important!

  • The 9-digit ITIN always begins with the number 9.
  • You are not eligible for earned income tax credit when using ITIN.
  • IRS authorized organizations called “acceptance agents” help people get ITINs.

Adoption Taxpayer Identification Number (ATIN)

What Is It?

ATIN is the temporary 9-digit number the IRS issues for a child, who is either a US citizen or a permanent resident and whose adoption is pending. This is to ensure that the adoptive parents can claim the child as their dependent. ATIN is issued when the adoptive parents cannot get the SSN for the child.

How To Apply For ATIN?

File IRS Form W-7A and attach a copy of the placement documentation. To be eligible the child must be legally placed in your residence for adoption. You can apply for ATIN if you are adopting from a foreign country but there are additional rules for doing that.

Important!

  • You are not eligible for earned income tax credit when using ATIN.
  • You will have to wait four to eight weeks to get an ATIN.
  • The ATIN gets automatically deactivated after 2 years so don’t forget to notify the IRS that the adoption is still pending.

Preparer Tax Identification Number (PTIN)

What Is It?

If you prepare and file tax returns on behalf of your client and charge for your services then it is mandatory for you to use a valid preparer tax identification number (PTIN) on the returns you prepare.

How To Apply For PTIN?

You can get PTIN online from the IRS within minutes. However, it can take you about four to six weeks if you choose to fill out form W-12 and mail it to the IRS.

Important!

  • If you assist people in preparing taxes voluntarily you don’t need a PTIN
  • IRS compiled a directory of federal tax return preparers to help you select the preparers with credentials and select qualifications.

FAQs

1. Do I need a TIN?

Yes, you need to provide your TIN on all tax-related documents i.e. when filing tax returns or claiming treaty benefits. That means if you have a permit to work in the US, plan on filing taxes with the IRS, run a business, or wish to avail of government-offered benefits and services you need a TIN.

Additionally, TIN must be on a withholding certificate if the beneficial owner wants to claim the tax treaty benefits & certain exemptions (effectively connected income & certain annuities).

2. Can I find my TIN online?

You will receive your TIN on an official document from the authorized agency. Since this unique identifier is a sensitive piece of information you don’t have the option to retrieve it online. If you forgot or can’t find the document contact the issuing agency to get your TIN again.

3. Is my Tax ID and TIN the same?

Yes, TIN is the same as a Tax I.D. as it stands for "tax identification number" or "taxpayer-identification number".

4. Is my Social Security Number and TIN the same?

A social security number (SSN) is one type of TINs. It is issued to individuals by the social security administration, an independent agency of the US govt. It allows the taxpayers to seek employment in the United States, to obtain credit with banks and other lenders, and they can file their annual tax returns with the IRS using their SSN.

SSN is a national identification number that is used for various purposes.

5. How do I know whether I have an ITIN or SSN?

Both the SSN and ITIN are the 9 digit numbers arranged in the same format as (xxx-xx-xxxx). However, the ITINs will always begin with the number “9” and will have a format as (9xx-xx-xxxx) same as the SSN. For example, the SSN will look like 123-45-6789 whereas the ITIN will be 912-34-5678.

6. Can I use ITIN instead of SSN?

No! You CAN NOT use your ITIN instead of SSN. An ITIN, or Individual Taxpayer Identification Number, is a tax processing number only available for certain non-resident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN).

So, if you are eligible for an SSN, then you need to apply for the SSN and that number should be used in your tax documents. While you're waiting to get your SSN you must use an Individual Taxpayer Identification Number (ITIN) when filing your tax documents. An ITIN will no longer be necessary after you obtain your SSN. Thereafter, your SSN will be the primary Identification number and that must be used for all future filing purposes. Your ITIN will become void.

Ines Zemelman, EA
Founder of TFX