EIN vs. SSN: What’s The Difference, and Where Does an ITIN Fit In?

The Internal Revenue Service(opens in a new tab) announced in 2014 that effective immediately, “Individual Taxpayer Identification Numbers (ITINs) will expire if not used on a federal income tax return for five consecutive years.”

This announcement generated some confusion. People wondered if it means that an individual's Social Security Number (SSN) or a business's Employer Identification Number (EIN) will expire if it is never used. To answer that question, we have to know what an ITIN is and how it differs from an SSN or an EIN.

We've also built a handy reference sheet outlining who needs what number. Download our free guide to The Difference Between SSN, ITIN, & EIN Explained.

EIN vs. SSN vs. ITIN: What’s the Difference?

What Is an SSN?

An SSN is a Social Security Number. SSNs are nine digits (xxx-xx-xxxx) and belong to US citizens and authorized residents.

Individuals who are employed and receive wages must have an SSN or apply for one. Every employer who sets up payroll and pays an individual wages must request the employee's SSN and report the employee's wages using that number. Parents must also obtain an SSN for any child that the parent(s) claim on an income tax return.

SSNs are issued by the Social Security Administration (SSA), and anyone who is eligible to have an SSN may apply for one by completing an application known as the Form SS-5. Any taxpayer with an SSN must use the SSN as an identifying number on their tax returns.

What Is an EIN?

An EIN is an Employer Identification Number(opens in a new tab). EINs are also nine digits, but formatted differently (xx-xxxxxxx).

Every business that pays employees or is required to file any business tax returns is required to obtain an EIN.

EINs can be obtained from the Internal Revenue Service by following the instructions in IRS Publication 1635(opens in a new tab), Understanding Your EIN.

What Is an ITIN?

An ITIN is a tax processing number that is issued by the IRS for individuals who are not eligible for an SSN, such as a foreign national or nonresident alien, but are required to file certain federal tax or information returns.

Like an SSN, an ITIN number is nine digits in the format xxx-xx-xxx. But the first digit will always be a 9, and the second section of the number will be in the range of 70-88 (e.g., 9xx-88-xxxx). As of 2012, the IRS had issued 21 million ITINs to taxpayers and their dependents.

To obtain an ITIN, an alien with foreign status should complete Form W-7(opens in a new tab), Application for IRS Individual Taxpayer Identification Number. No one should have both an ITIN and an SSN. For example, if an SSN application is pending, an ITIN will not be issued even if the individual completes and submits a Form W-7.

Related post:

Contractor or Vendor: How Do Businesses Classify for Correct Payment?

Identification Numbers FAQs

How Do I Apply for an ITIN Number?

Option 1:

Mail your W-7, tax return, proof of identity, and foreign status documents to the IRS Austin Service Center.

Option 2:

Apply for an ITIN in-person using the services of an IRS-authorized Certifying Acceptance Agent(opens in a new tab). This will prevent you from having to mail your proof of identity and foreign status documents.

Option 3:

Make an appointment at a designated IRS Taxpayer Assistance Center. This will also prevent you from having to mail your proof of identity and foreign status document.

After processing, the IRS will issue your ITIN through the mail.

To get the full application instructions, visit the IRS’s webpage(opens in a new tab) on how to apply for an ITIN.

How Long Does It Take to Get an ITIN?

According to the IRS, usually within 7 weeks after qualifying for an ITIN and your application is complete, you should receive a letter from the IRS assigning your tax identification number.

How to Check If Your ITIN Number Is Valid?

If you’re unsure about the status of your ITIN, you may call the IRS toll free line at 1-800-829-1040. Visit the IRS’s ITIN Expiration FAQs page for more details(opens in a new tab).

As for ITIN renewals, if you receive the CP-48 Notice after you have submitted your Form W-7 to renew your ITIN, you may disregard the notice. No additional action is required. You should not renew an ITIN if the ITIN holder now has or is qualified to get a social security number (SSN).

The IRS will send the applicant a notice CP565 , Confirmation of your Individual Taxpayer Identification Number, when an ITIN is renewed.

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FAQ

Is it possible to use an EIN instead of an SSN?

An EIN can be used instead of an SSN for certain business and tax purposes, but it does not replace an SSN for personal identification or individual tax purposes.

Which tax identification number should I use?

The right tax identification number depends on your circumstances: an SSN generally identifies eligible individuals, an ITIN is for certain individuals who need a U.S. taxpayer ID but aren’t eligible for an SSN, and an EIN identifies businesses and other entities for federal tax purposes.

What are some common uses of an Employer Identification Number (EIN)?

An EIN is commonly used to file business taxes, report and pay employment taxes, hire employees, and open certain business bank accounts or apply for business licenses.