What Is a Taxpayer Identification Number (TIN)?
A taxpayer identification number (TIN) is a unique nine-digit number used to identify an individual, business, or other entity in tax returns and other documents filed with the Internal Revenue Service (IRS). A TIN is typically either a Social Security number or an employer identification number (EIN), depending on the entity that it is being issued to.
Most individuals elect to use their Social Security number as their TIN. Sole proprietors who have no employees may use either their Social Security numbers or an EIN. Corporations, partnerships, trusts, and estates must use an EIN assigned by the IRS.
The TIN is also known as the 95-number or the tax-ID number.
How a Taxpayer Identification Number (TIN) Works
A TIN is formatted in the same way as a Social Security number: xxx-xx-xxxx. For most individuals, their Social Security number will be their taxpayer identification number. Businesses and any other entities that cannot use a Social Security number as a TIN must obtain a TIN number from the IRS.
- A taxpayer identification number is an umbrella term that covers several types of nine-digit identification numbers used by individuals and/or businesses for tax filing with the Internal Revenue Service (IRS).
- For most individual taxpayers and many sole proprietors, their Social Security number is their taxpayer identification number.
- Most businesses are required to use a type of taxpayer identification number issued by the IRS called an employer identification number (EIN).
TIN is an umbrella term that may refer to any of the five primary types of taxpayer identification numbers:
- Social Security number (SSN)
- Employer identification number (EIN)
- Individual taxpayer identification number (ITIN)
- Adoption taxpayer identification number (ATIN)
- Preparer tax identification number (PTIN)
The Social Security Administration issues Social Security numbers to U.S. citizens and qualified aliens. Certain resident and nonresident aliens who are ineligible to obtain Social Security numbers may file form W-7 with the IRS in order to receive an ITIN. The IRS authorizes acceptance agents–such as colleges, financial institutions, and accounting firms–to assist applicants in obtaining ITINs.
The IRS requires the use of taxpayer identification numbers on many tax-related documents. These documents include tax returns, statements, and reports. Banks and other businesses use TIN numbers when interacting with other entities.
A tax identification number must appear on all materials submitted to the IRS to claim tax benefits or exclusions, or to pay taxes. For example, taxpayers filing annual tax returns must provide a TIN on the return, and employers reporting wages paid to employees must provide the employees' TINs.
The IRS sometimes issues an adoption taxpayer identification number (ATIN) for a child who is in the process of being adopted by U.S. taxpayers. In these cases, the number is temporary and will be replaced when the child is eligible to receive a Social Security number.
The IRS requires paid tax preparers to include a preparer tax identification number (PTIN) on all tax returns or claims for refunds that they prepare (either substantially or in full). Tax preparers may apply for these numbers by mail or online. Special rules apply to foreign tax preparers who are unable to obtain Social Security numbers.
TIN vs. EIN
Employer identification numbers (EINs) are one type of TIN. Sometimes, EINs are also referred to as federal employer identification number. The IRS requires businesses, including corporations and partnerships–as well as some trusts and estates–to use EINs.
The IRS advises that responsible parties ensure a business is legally formed before obtaining an EIN. Typically, a new EIN must be obtained if a business' ownership or structure changes. The document assigning the EIN must be kept by the business or individual to whom it is assigned.
Sole proprietors who do not have employees may use an EIN or a Social Security number. A sole proprietor who employs at least one other individual must obtain an EIN from the IRS.
In addition, the IRS requires that certain entities use an EIN for their TIN if they fall under certain categories. Examples include any entities that have a Keogh plan or any entities that file returns related to the sale of alcohol, tobacco, or firearms.