Tax identification numbers (TINs) and corporate numbers are similar concepts with some important distinctions. A tax ID number is used to identify different kinds of taxpayers while a corporate number is used by limited liability companies (LLCs) or other corporations. Understanding the differences between the types of identification numbers makes filing taxes easier, so keep reading to learn the different kinds of ID numbers you might need to operate your business.
A TIN is an ID number the IRS uses to administer tax laws. The purpose is to assign a number to each taxpayer, whether that’s an individual or a business. Each person’s or business’ number is unique to them, which makes it easy for the government to track.
This number is assigned by the IRS and used by businesses to file tax returns, pay taxes and secure approval to conduct other business operations. When you first start a business, you apply for a taxpayer ID number through the IRS.
Corporations and LLCs receive a corporate number upon approval of their articles of incorporation. This number is equivalent to the federal (TIN) or an EIN.
“A corporate tax ID is interchangeably used with employer identification number, which applies to entities other than corporations as well,” said Selva Ozelli, tax director at Gelfand, Rennert and Feldman.
In California, however, corporations receive seven-digit corporation numbers from the California Secretary of State or Franchise Tax Board and LLCs receive a 12-digit corporate number. The company can then use this number to apply for an EIN. In most states, though, a corporate number is the equivalent of an EIN.
The term “taxpayer identification number” refers to five different types of numbers used to identify taxpayers:
For businesses, EINs are the most relevant tax ID numbers. These help the government track business taxation at the federal level. Sole proprietorships and single-member LLCs may use Social Security numbers as their business’ tax ID number.
The terms “corporate number” and “EIN” can be used interchangeably. The official term used by the IRS and other government entities is “employer 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.
Tax identification numbers refer to any type of number the government can use to identify a taxpayer. For businesses, this is the employer identification number or corporate number, terms that are used synonymously.
The five types of tax ID numbers differentiate the wide range of taxpayers. Here’s a detailed look at each type.
This is also referred to as a “federal tax identification number” or “federal employer identification number.” EINs identify business entities, like Social Security numbers for businesses.
EINs for publicly traded companies and nonprofits are public information. Nonprofit EINs are available so that people and businesses donating to the nonprofit can confirm that it 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. Businesses can apply for an EIN through the IRS website.
“Businesses that are registered with the IRS typically use an employer ID number for the business identity,” said Ozelli. “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.”
You can have as many EINs as you have businesses. So, if you own two businesses, you will have two EINs. It’s important to track and manage the finances of your business entities independently to have a better understanding of your tax liabilities, revenue, expenses, profitability and cash flow.
To receive a Social Security number, you either need to be a U.S. citizen or a legal alien. A Social Security number is a nine-digit identification number that is formatted like “###-##-####.” An individual needs this number to get a job and to collect Social Security and other government benefits. The Social Security Administration stresses the importance of keeping these numbers safe and private. Some businesses, like sole proprietorships, use the owner’s personal Social Security number on tax forms related to the business.
“An employer ID and a Social Security number are both tax IDs,” said Tom Wheelwright, certified public accountant and CEO of WealthAbility. “Nonresidents of the U.S. can get a separate individual taxpayer identification number to report your personal income to the IRS.”
Formatted just like a Social Security number, an individual TIN (ITIN) is “a tax processing number only available for certain nonresident and resident aliens, their spouses and dependents who cannot get a Social Security number,” according to the IRS.
An ATIN is a temporary nine-digit code for those adopting a U.S. citizen or resident child for cases where the adopting taxpayers are unable to get a Social Security number before filing taxes. This is a very specific use case and this form of tax ID is personal in nature.
Paid tax preparers are required to use preparer TINs (PTINs) on any tax returns they prepare. You can apply for this number online or with a paper form.
Understanding the different types of tax ID numbers available to your business is the first step. It’s also important to know what paperwork is required and where you can access this information.
You can find your Social Security number on your Social Security card. You have to provide it on several important documents, like your W-2 form, tax returns and bank applications.
If you lost your card and can’t remember your number, you can fill out a Social Security card application online, which you can print and turn in to your local Social Security office along with the appropriate documents. If you want to check your Social Security number online, you can set up your Social Security Administration account as long as you can provide the appropriate identification.
The IRS assigns your EIN. To obtain one, you will need to complete and file Form SS-4. You can file the form online, by mail or fax or over the phone if your business started outside of the U.S.
To file for your ITIN, mail a completed Form W-7, proof of your identity and any foreign state documentation to the IRS at this address:
Internal Revenue Service
Austin Service Center, ITIN Operation
PO Box 149342
Austin, TX 78714-9342
You can also submit your ITIN application in person through an IRS-authorized Certifying Acceptance Agent program or contact your local IRS Taxpayer Assistance Center to have the IRS send you your ITIN by mail.
You can get a TIN for pending U.S. adoptions (ATIN) by filing Form W-7 A. You may also get this application in person at the IRS office or by calling (800) 829-3676.
If you plan on launching your business, one of the first steps should be obtaining a tax identification number and incorporating as an LLC or corporation. While independent contractors that are merely freelancing can wait until their business grows, any company planning on doing substantial business from day one should make sure all this documentation is in place and recognized by all relevant state and federal governments. Ensuring all your legal documentation is complete is the first step to building a successful business that will stand the test of time.
Tejas Vemparala also contributed to this article. Some source interviews were conducted for a previous version of this article.