Is EIN and TIN the Same? A Detailed Explanation

If you are a new business or you have filed a tax return before, you might have come across phrases such as EIN and TIN.

You must be wondering, “Are EIN and TIN the same?” Many people regard them as two synonymous terms since they tend to be confusing and sound alike while relating to tax matters. However, they are not similar in any way.

In this article, we break down the differences between EIN and TIN, explain what each one means, when you might need them, and how they are used.

By the time we have finished reading this article, we know that you will understand EIN and TIN clearly and how they apply to you or your business.

Let’s get rolling!

What is a TIN?

Let’s first off talk about TIN. TIN just simply represents the abbreviation Taxpayer Identification Number. It is a general term that the Internal Revenue Service uses in order to single out individuals and businesses with regards to tax purposes.

Just imagine that TIN was just like a unique code where the IRS used one to keep track of who was actually paying taxes. It is very crucial because, without a TIN, the IRS would not know who was supposed to pay taxes or who was supposed to receive tax benefits.

So here’s something important to know: TIN is not one but rather a group of various different numbers that fall into this category. There are several types, so let’s just look at the main TINs:

• Social Security Number (SSN) – This sort of TIN has been very popular in the entire United States to file their taxes. It helps for employment and social security benefits.
• Employer Identification Number (EIN) – This is for businesses, corporations, and organizations. We shall expound on this later.
• Individual Taxpayer Identification Number (ITIN) – For individuals who are ineligible to receive an SSN but who have a responsibility of paying tax and they include for example foreign nationals or non-residents.
• Adoption Taxpayer Identification Number (ATIN) – It is issued for children during the adoption process if they have not yet received an SSN.

As you would see, the TIN concept is a pretty broad term. While it includes many identification numbers, EIN is indeed just one of them. And there are others.

What is an EIN?

Now that we already know what a TIN is, we are able to focus on an EIN. An EIN is Employer Identification Number that just so happens to be an extremely unique number of nine digits given by the IRS for a specific purpose in specific business practices that require it for taxation reasons. If you are running a business, the possibility of needing an EIN is very high. The IRS uses this number to identify your business when paying taxes, filing tax return forms, and other major financial activities.

How does it work? When opening a business, you apply for an EIN through the Internal Revenue Service. This number is like a social security number for your business.

It helps the government know who is in charge of the taxes of the business, thereby making it easier for you to manage the bookkeeping of the business.

When do I need an EIN?

You might be asking yourself, “Do I need to obtain an EIN for my business?” The answer is no, not every business needs an EIN; however, most do. You will typically need an EIN in the following situations:

• If you have employees – If you have employees, you’ll need an EIN in order to report wages and pay employment taxes.
• If your business is a corporation or partnership – You need an EIN if your business is an entity formed as a corporation or partnership, or if it’s an LLC with more than one member.
• If you withhold taxes – You need an EIN if your business withholds taxes on income other than wages paid to a non-resident alien.
• If you need to file specific types of tax returns – Employment, excise, or alcohol, tobacco, and firearms taxes, you will need an EIN.
• Opening a business bank account – Most banks insist on an EIN before opening a business bank account.
• Applying for business licenses – Most states and local governments require an EIN before issuing business licenses.

So, in case any of the above circumstances suit you, then you’ll be required to get an EIN for your business.

Key Differences Between EIN and TIN

Now that we have understood what TIN and EIN are, let us hence focus on the key differences between the two.

• General term vs. Specific one: TIN encompasses all the kinds of tax identification numbers, and it includes SSN, ITIN, ATIN, EIN. On the other hand, EIN is a sort of TIN that is only used for business.
• Who are the users? TIN can be put to use by an individual, company, and every other subject with respect to the type in question. EIN, however, is used by businesses, organizations, and some special trusts or estates.
• Purpose: TIN is applied to tax returns for individuals and corporations. EIN is primarily applied for tax only if a business or other organization. Taxes might be related to reporting wages or employment taxes.
• Format: All TINs are nine digits long, but the structure of a SSN is XXX-XX-XXXX and of an EIN is XX-XXXXXXX.

Do You Need Both EIN and TIN?

Here’s the easy answer: No – because EIN is a kind of TIN. If your business has an EIN, that’s your TIN for business purposes.

But if you’re an individual then you might just need an SSN, which is another way to refer to TIN. One must know that all EIN’s are indeed a TIN but not all TIN’s are necessarily EIN’s.

If you own a business, chances are that you will see every word, but make sure you are on the right terminology for your situation.

How to Get An EIN

Getting an EIN is not complicated and you can even do it online from the IRS. Here’s how to do it.

1. Go to the IRS website – You can access the website of IRS, and reach to the page with contains the application for EIN.
2. Submit your application – You will be required to provide some basic information about your business, such as its legal name, structure, and address.
3. Get your EIN – After submitting your form, you will get your EIN right away! And the best part is it is free.

Conclusion: Are EIN and TIN the Same?

So are EIN and TIN the same? Well, in short, no – but they are pretty closely related. TIN is generic in reference, which encompasses a couple of tax identification numbers. EIN is one given exclusively to businesses.

Knowing what these two terms refer to can be extremely important to you if you’re considering starting a new business or filing taxes.

By knowing which one applies to you, you can keep track of everything and not forget your tax responsibility. And now that you know the difference, you’re good to go with conquering the world of taxes!

For further assistance with EIN applications, check out our EIN page. Also, you can check for more information on the IRS.

Want to know more about the process? Throw your questions in the comments below!