EIN vs ITIN: What's the Difference?
There are many numbers that are used to identify ourselves and our corporations or LLCs, such as a Social Security number, driver's license number, passport number, DUNS number and EIN (Employer Identification Number).
Two of these numbers, the Federal Employer Tax ID number (EIN) and the individual taxpayer identification number (ITIN) are central to the formation process for your Delaware business. Let's dive into the key difference between an EIN and an ITIN.
What Is an EIN?
The Federal Tax ID Number, known as an EIN, is an identification number used by the IRS to administer tax laws. Employer Identification Numbers are used to identify an entity to the IRS, banks and other businesses.
Think of this number as the social security number for a business. The EIN is typically needed to operate your business in the United States, do banking in the United States, hire employees and file taxes with the IRS.
A couple commonly asked questions regarding the EIN application:
What is a 'responsible party', as required on the ss4 form?
The responsible party must be an individual. For a Corporation, the responsible party is an officer of the company and for an LLC, the responsible party is an owner or member of the company.
As my registered agent, is Harvard Business Services’ address, the address of my company?
The address of your company is not Harvard Business Services’ address. The IRS requires a physical business address for your company, even if it is based outside of Delaware and the U.S. Also be prepared to provide the IRS with a brief description of the nature of your business. You have up to 50 characters including spaces for this field.
We can help you obtain an EIN for an existing company or form a Delaware company and obtain an EIN.
Non-U.S. residents, please note that once you submit your EIN order, you will be required to provide a copy of the passport or government-issued ID for the person listed as the responsible party.
What is an ITIN?
The individual taxpayer identification number (ITIN) is a tax number only available to certain non-U.S. residents, resident aliens, their spouses and dependents who are not able to obtain a social security number (SSN). ITINs always start with a "9" and are typically formatted like a Social Security number: 9xx-xx-xxxx.
Forming a Delaware corporation or LLC as a non-resident is perfectly acceptable when the foreign individual or group applies for an ITIN. If there is a tax filing requirement with the IRS, an ITIN is needed.
For example, if a company has U.S. source income and profits or losses that flow through to the member or shareholder, owners typically need to obtain an ITIN in order to complete a tax filing with the IRS.
ITINs are issued regardless of immigration status because both resident and non-resident aliens may have a U.S. filing or reporting requirement under the Internal Revenue Code.
Do you need help getting your ITIN? You can obtain an ITIN Number by completing Form W-7 and mailing it to the IRS. Alternatively, you can contact one of the ITIN acceptance agents listed by the IRS for assistance. There are agents available within the U.S. as well many countries internationally.
Make sure you know the difference between an EIN and an ITIN before you form your next corporation.
Next: Tax IDs for Non-U.S. Citizens
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
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There are 19 comments left for EIN vs ITIN: What's the Difference?
Andreina said: Tuesday, September 25, 2018This is more of a question? I have an ITIN number already... I need to know if I'm able to use it to apply for an apartment or maybe purchase a car... Or is it only for taxes? And if I'm not working.. how do I go about filing.. or may the pertim staying with use it on there taxes? So many more questions not enough time.. would love your help and advice...
HBS Staff replied: Thursday, September 27, 2018We can't provide advice on how to use your ITIN except that any vendor or agent requesting a tax ID will be able to tell you if the ITIN is sufficient or if they need a personal Tax ID. We encourage you to check with a tax professional if you have specific questions about where you can use your ITIN.
Katia said: Saturday, May 26, 2018Hi!! If i want to form a new LLC, and im not a US resident. Do I need to Get an ITIN number to start the LLC? I mean the ITIN Is required before or as a part of the files needed to obtain the EIN and Open a business Bank acount? And, do you could help us un the end-to-end process to start a new LLC? Do You have spanish support? Thanks
HBS Staff replied: Tuesday, May 29, 2018We can best answer those questions for you if you call 1-800-345-2677 during business hours 9-5 EST. Ask to speak to Alex Oliveras, as he speaks Spanish.
Amaia said: Friday, March 9, 2018Hello, My friend has an ITIN number only. For tax purposes he needs to know is his ITIN has to go on the SSN field or on the FEIN field? I have been asking for everywhere, but no answer. Even the IRS info does not address this issue. Maybe you know...I hope! Thank you.
HBS Staff replied: Monday, March 12, 2018Which form are you referring to? It is unclear in your question.
Emmanuel Darkadakis said: Tuesday, January 17, 2017Hi All, I think about forming an LLC in Delaware to operate as a holding company for one or more businesses located & working in EU- no transactions in USA or with USA-based firms some have EU affiliates however. My questions are: a do I need an ITIN or EIN there will be no operations in USA of any kind?, b can you assist in opening a bank account in USA or UAE? c will I have to pay taxes for the LLC or myself in the US?
HBS Staff replied: Wednesday, January 18, 2017We would be happy to assist you in the forming of a Delaware LLC. A company is often only required to get an EIN if the company is operating lawful business activities in the U.S., opening a U.S. bank account or hiring U.S. citizens for employment. Every bank and banker is different as far as what they require to open a bank account.
At this time, we cannot assist you with opening a bank account. If you’re looking to open a U.S. bank account, the bank will require you to go into the bank in person, with a copy of your company's Certificate of Formation and Federal Tax ID Number (EIN). Generally, a Non U.S. citizen with a non U.S. source of income does not pay federal income tax.