What is Tax ID in the USA?

A Tax ID is an identification number assigned to an individual or company and issued by the tax authority. In the United States, the Internal Revenue Service (IRS) is responsible for collecting and controlling taxes at the federal level. They are also responsible for assigning a tax identifier. And is also responsible to the Social Security Administration in the case of Social Security numbers.

The most important U.S. tax identifiers for businesses are the Social Security Number (SSN), Employer Identification Number (EIN), and Individual Taxpayer Identification Number (ITIN).

What is an SSN?

The IRS or Social Security Administration (SSA) issues a Social Security number to everyone in America. The purpose of this tax identifier is to track individual income and collect taxes. The SSN is not available to non-residents of the United States.

When it comes to paying taxes, the ITIN is the equivalent of an SSN for non-US residents. But not in terms of employment or social benefits.

What is ITIN?

You need a taxpayer ITIN if:

• You do not have an SSN, and you are not eligible to get one.
• You must provide a federal taxpayer identification number or file a federal tax return.
• As a nonresident alien, you must file a U.S. tax return. The same is the case if you are a nonresident alien claiming benefits under a tax treaty.

To apply for an ITIN, you must complete Form W-7 and submit it to the IRS. In addition, your accountant must prepare a U.S. income tax return. Also, you need proof of identity and foreign status.

Foreign LLC members or shareholders of a corporation need an ITIN number to file U.S. federal income tax returns and comply with U.S. agency requirements. Something similar happens with companies themselves, which also need another tax ID to do business in the United States.

The ITIN will expire if you don't use it to pay taxes for 3 years.

What is EIN?

An EIN is a tax identifier assigned by the IRS to U.S. companies for filing tax returns, hiring personnel, and opening commercial bank accounts.

To get an EIN, you will need to complete and submit an SSN form to the IRS. You can also open a business in the U.S. without any U.S. tax ID with the help of our TaxFreeCorp team.

What are the differences between SSN, EIN, ITIN, and tax ID in the United States?

So, SSN is a taxpayer identification number issued by the IRS to US residents. As for an EIN, it is a company identifier. An ITIN is the equivalent of an SSN for non-US residents who want to do business in the US and comply with US laws and tax authorities.