ITIN vs EIN: Which One Do You Need for Taxes?

When it comes to paying taxes in the U.S., things can get confusing—especially if you’re not a citizen, own a business, or are new to the system. One common question many people have is: What’s the difference between an ITIN and an EIN?

In this guide, we’ll walk you through everything you need to know about these two types of tax ID numbers. We’ll explain what each one is for, who needs them, and how to apply. Whether you’re a small business owner, a freelancer, an immigrant, or someone investing in the U.S.—this article is for you.

Let’s break it down, nice and easy.

What Is an ITIN (Individual Taxpayer Identification Number)?

An ITIN, or Individual Taxpayer Identification Number, is a special number the IRS gives to people who need to pay taxes but aren’t eligible to get a Social Security Number (SSN).

This number is only for tax purposes. That means:

• You can use it to file your taxes,
• But you can’t use it to work in the U.S. or get Social Security benefits.

The IRS gives out ITINs to help people stay on top of their tax responsibilities—even if they’re not U.S. citizens.

Who Needs an ITIN?

You might need an ITIN if:

• You’re a non-resident alien (someone who lives in another country but earns money in the U.S.)
• You’re a dependent or spouse of a U.S. citizen or green card holder and don’t qualify for an SSN.
• You’re a foreign investor who makes income from U.S. sources.
• You’re a student, researcher, or scholar in the U.S. under a visa and need to report income.

So, if you’re earning money in the U.S. and don’t have an SSN, an ITIN helps you follow the tax rules.

How to Apply for an ITIN

Here’s how you can get an ITIN:

• Fill out Form W-7: This is the official IRS form to request an ITIN.
• Collect your ID Documents: You’ll need proof of identity and foreign status, like a passport.
• Submit your Application: You can send it, By mail, Through an IRS-certified acceptance agent, and At certain IRS offices overseas
• Processing Time: Usually, it takes about 7 weeks, but it can be longer during tax season.
• Keep in Mind: If you don’t use your ITIN for 5 years, it expires. So, it’s important to file taxes regularly.

Pros of an ITIN

Having an ITIN can help you:

• File your taxes properly
• Stay in compliance with U.S. tax laws
• Claim tax credits you qualify for, like the Child Tax Credit (in some cases)

Cons of an ITIN

However, an ITIN has limits:

• It doesn’t let you work legally in the U.S.
• It doesn’t give you Social Security or retirement benefits

What Is an EIN (Employer Identification Number)?

An EIN, or Employer Identification Number, is like a Social Security Number for businesses. It’s given by the IRS to help identify your business for tax purposes.

You’ll use an EIN to:

• Pay business taxes
• Hire employees
• Open a business bank account
• Apply for business credit

Basically, if you’re running any kind of business in the U.S., you likely need an EIN.

Who Needs an EIN?

You may need an EIN if you are:

• A business entity (LLC, corporation, or partnership)
• A sole proprietor who has employees
• A trust or estate
• A nonprofit or religious organization

Even if you’re a freelancer or contractor, getting an EIN can help separate your business finances from your personal ones.

How to Apply for an EIN

You’ve got a few easy options:

• Online: The fastest way—go to the official IRS website.
• Mail or Fax: Fill out Form SS-4 and send it in.

If you apply online during IRS hours, you can get your EIN immediately.