- Tax ID numbers refer to five different types of numbers, including Social Security numbers and Employee Identification Numbers.
- Corporate number is a term used to describe Employee Identification Numbers.
- Social Security numbers are individual tax ID numbers.
- Corporate numbers, or Employee Identification Numbers, are tax ID numbers for businesses.
- Sole proprietorships and single-member LLCs may use Social Security numbers as their tax ID number rather than corporate numbers.
As an individual or a business owner, managing taxes can be a struggle. There are hundreds of forms, rules and exceptions out there that the average person probably hasn't even heard of. Filing your taxes can be tricky, especially if you don't understand the terminology.
We'll take you through the difference between a taxpayer identification number and a corporate number to improve your knowledge of these two similar, yet different terms. For those wondering what the difference is between a tax ID number and a corporate number, it's important to define both terms and dig deeper into the complexities.
What is a tax ID number?
A tax identification number, or TIN, is defined by the Internal Revenue Service as an ID number used by the IRS to administer tax laws. This definition is a bit vague and requires further digging. Let's start by explaining the five types of TINs.
- Social Security number (SSN) – To receive a Social Security number, you either need to be a U.S. citizen or a legal alien. SSNs are nine-digit identification numbers that are formatted like "NNN-NN-NNN." These numbers are needed to work, collect Social Security benefits and other government benefits. The Social Security Administration stresses the importance of keeping this document safe, as it is an important identification number.
- Employee Identification Number (EIN) – This is also referred to as a federal tax identification number or an Employer Identification Number. EINs identify business entities and can be looked at like Social Security numbers for businesses. EINs for publicly traded companies and nonprofits are available to the public. Nonprofit EINs are made available so people and businesses donating to the nonprofit can confirm that the organization holds tax-exempt status from the IRS. This is a good way to confirm a nonprofit is registered correctly with the IRS before donating to the organization.
- Individual taxpayer identification number (ITIN) – Formatted just like a Social Security number, ITINs are defined by the IRS as, "a tax processing number only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security number."
- Taxpayer identification number for pending U.S. adoptions (ATIN) – An ATIN is a temporary nine-digit code for those adopting a U.S. citizen or resident child where the adopting taxpayers are not able to get a Social Security number before filing taxes. This is a very specific use case, and this form of TID is personal in nature.
- Preparer taxpayer identification number (PTIN) – Paid tax preparers are required to use PTINs on any tax returns they prepare. You can apply for this online or by using paper forms.
An EIN is commonly the form of taxpayer identification number a business will use. Businesses can apply for an EIN online, through the IRS' website. An EIN, along with the other four numbers mentioned, are all forms of taxpayer identification numbers. [Interested in finding the right online tax software to help your small business? Check out our reviews and best picks.]
Some businesses, like sole proprietorships, use their own personal Social Security numbers on tax forms related to their business.
"Business that are registered with the IRS typically use an employer ID number for the business identity," said Selva Ozelli, international tax attorney and CPA. "An EIN is used by all other types of businesses, even if the business has no employees … The single-member LLC business type is an exception. If you are the sole owner of an LLC, you should use your Social Security number, not the EIN of the business."
The purpose of tax ID numbers is to assign a number to each taxpayer, whether that's an individual or a business. These numbers are unique to each person or business, which makes it easy for the government to track. There are several different types of tax ID numbers that are used to differentiate the wide range of taxpayers.
Additionally, there are state tax ID numbers that are only used to report state taxes. The IRS requires a state payroll tax return for each of a business's employees.
What is a corporate number?
A corporate number is a number given to corporation or LLCs when the organization's articles of incorporation are approved. This number is the equivalent of the federal tax identification number, or EIN.
"Corporate tax ID is interchangeably used with EIN, which applies to entities other than corporations as well," said Ozelli.
California corporations, however, receive seven-digit corporation numbers that are assigned to them by the Secretary of State or the Franchise Tax Board. LLCs receive a corporate number composed of 12 digits. These can then be used to apply for EINs. For most states, though, a corporate number is the equivalent of an EIN.
The difference between a tax ID number and a corporate number
A taxpayer identification number refers to five different types of numbers used to identify taxpayers. Those five types are Social Security numbers, Employee Identification Numbers, individual taxpayer identification numbers, taxpayer identification numbers for pending U.S. adoptions and preparer taxpayer identification numbers. For businesses, EINs are the most relevant tax ID numbers. These help the government track business taxation on the federal level. Sole proprietorships and single-member LLCs may use Social Security numbers as their business's tax ID number.
Corporate numbers are a term used interchangeably with Employee Identification Numbers. The official term used by the IRS and other government entities is Employee Identification Number or federal tax identification number.
Tax ID numbers are used for federal taxation and apply to both individuals and businesses, whereas corporate numbers and EINs apply solely to businesses. In short, corporate number is a synonym for Employee Identification Number, which is a form of tax ID number.