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What is a Tax Identification Number?
A Tax Identification Number (TIN) is a nine-digit tracking number assigned and used to identify a taxpayer.
If you receive an income, or have any reportable or otherwise taxable activity (in the case of an entity or business), the government expects you to pay taxes on it. To do so, the IRS requires that you first provide a Tax Identification Number.
A Social Security number is one form of TIN and is used by most taxpayers when filing their federal and state taxes.
A TIN is also required for non-tax-related purposes, such as opening a bank account, applying for a loan, applying for a job, buying or renting property and claiming benefits from the government.
Other types of Tax Identification Numbers
Social Security number
The most common type of Tax Identification Number is the Social Security number (SSN) issued by the Social Security Administration. A Social Security number is assigned to U.S. citizens, permanent residents and some nonimmigrant workers. Parents must apply for a Social Security number for their children before they can claim them as dependents.
A Social Security number is mandatory for individuals who want to use government services, claim benefits, seek employment or file taxes. Applying for a Social Security number (or any other TIN for that matter) is free.
Employer Identification Number
The Employer Identification Number (EIN) is the TIN issued to corporations, nonprofit organizations, estates, trusts and any other business that are required to pay taxes. This number is used when reporting annual income for taxation.
The IRS offers a list of yes or no questions to help you determine whether you need an EIN.
Individual Taxpayer Identification Number
If a nonresident or resident alien (or their spouse or dependent) is ineligible for a Social Security number, they are issued a nine-digit Individual Taxpayer Identification Number (ITIN). This is similar to a regular nine-digit TIN, but to obtain this, the individual needs to submit Form W-7 along with documents proving their resident status.
Adoption Tax Identification Number
In the case of domestic adoption of children, if the adoptive parents are unable to obtain the child's Social Security Number for tax purposes, they can apply for an Adoption Tax Identification Number (ATIN). Certain conditions must be met, such as the adoption has to be pending and the child should be a U.S. citizen or permanent resident.
Preparer Tax Identification Number
Issued to tax preparers, a PTIN, or Preparer Tax Identification Number, must be included on all returns completed by a paid tax professional.
How to get a Tax Identification Number
The IRS offers information on how to apply for different Tax Identification Numbers.
- Social Security number: Complete Form SS-5, Application for a Social Security Card PDF, and submit proof of your identity, age, and U.S. citizenship or lawful alien status, the IRS says.
- Employer Identification Number: There are a number of ways to apply for an EIN, including online, fax, mail and telephone.
- Individual Taxpayer Identification Number: Complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number. You must submit documentation of your nonresident or resident alien with the Form W-7. You can mail the material, take it to an IRS walk-in office or submit it through an Acceptance Agent authorized by the IRS.
- Adoption Tax Identification Number: Complete Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions.
- Preparer Tax Identification Number: Tax preparers can apply for a PTIN through the IRS sign-up system. You can also complete Form W-12, IRS Paid Preparer Tax Identification Number Application. However, the IRS notes that the paper application takes four to six weeks to process.
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