Ein Vs Tin 2025: The practical difference, who needs which, and how to get the right number

Overview

A Taxpayer Identification Number (TIN) is the umbrella category of federal tax identifiers; an Employer Identification Number (EIN) is one specific TIN used for businesses. This article explains the practical differences, who should use which identifier, and how to obtain and manage the correct number for U.S. and international founders.

Use the guidance below to align your banking, payroll, licensing, and information‑reporting needs around the right identifier and avoid common operational delays.

What is the difference between an EIN and a TIN?

An EIN is a specific type of TIN assigned to business entities, while TIN is the broader term the IRS uses for any taxpayer identifier. In short: all EINs are TINs, but not all TINs are EINs.

The IRS lists multiple TIN subtypes used by individuals and entities for federal tax purposes. Individuals generally use Social Security Numbers (SSNs); businesses and some trusts or estates use EINs. Other TINs include ITINs, ATINs, and PTINs depending on the situation; see the IRS overview of Taxpayer Identification Numbers for authoritative definitions (https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin).

What types of TINs exist and who issues each?

The major TIN types are SSN, EIN, ITIN, ATIN, and PTIN, issued by the Social Security Administration or the IRS depending on the type. SSNs are issued by the Social Security Administration; the other TINs listed above are issued by the IRS.

An SSN is primarily for U.S. individuals for tax reporting and employment (https://www.ssa.gov/number-card/). An EIN identifies business entities and certain trusts/estates. An ITIN supports tax reporting for individuals not eligible for an SSN (https://www.irs.gov/individuals/individual-taxpayer-identification-number). ATINs are temporary for adoptive parents; PTINs are required for paid tax return preparers (https://www.irs.gov/tax-professionals/ptin-requirements-for-tax-return-preparers).

Why does the EIN vs TIN distinction matter in 2025?

Because the identifier determines what you can do operationally—open business bank accounts, run payroll, obtain licenses, and file the correct returns. Using the right identifier prevents onboarding delays, rejected filings, and potential penalties.

Banks and payment processors request an EIN for business accounts and will require the TIN during Know Your Customer checks. Payroll filings such as Forms 941 and 940 use an employer’s EIN; many state registrations and business licenses also require a federal EIN. For guidance on when to get federal and state tax IDs, see the U.S. Small Business Administration (https://www.sba.gov/business-guide/launch-your-business/get-federal-state-tax-id-numbers). Also consider Beneficial Ownership Information requirements from FinCEN when forming an entity (https://www.fincen.gov/boi).

Who needs an EIN and who can use an SSN or other TIN?

Most formal entities—partnerships, corporations, and multi‑member LLCs—need an EIN; many sole proprietors and single‑member LLCs may use an SSN unless specific triggers apply. Non‑U.S. founders can obtain EINs without an SSN.

If you operate as a clearly separate legal entity, handle payroll, file certain excise taxes, or make specific tax elections, you will generally need an EIN. If you remain a sole proprietor with no employees and no excise obligations, an SSN can sometimes suffice, though many business partners and banks prefer an EIN for business dealings.

Here’s a quick mapping of common scenarios to the typical identifier.

• Sole proprietor with no employees: typically may use SSN; EIN is recommended when clients or banks request it.
• Single‑member LLC (disregarded) with no employees: may use owner’s SSN; must obtain an EIN for employees, excise taxes, or certain elections.
• Multi‑member LLC / partnership: needs an EIN.
• Corporation (C or S): needs an EIN.
• Nonprofit organization: needs an EIN.
• Any structure hiring employees or running payroll: needs an EIN.

Choose early if you expect to hire employees, elect S‑corporation status, or open a business checking account to avoid rework and mismatches.

How does this apply to sole proprietors and single‑member LLCs?

A sole proprietor or single‑member LLC with no employees and no excise obligations can often use an SSN, but an EIN becomes required if you hire employees or make specific tax elections. Using an EIN can also reduce exposure of your SSN in business settings.

Banks, marketplaces, and larger clients commonly request an EIN on W‑9 forms to separate business and personal identity. If you plan to onboard enterprise customers, hire staff, or set up retirement plans, obtain an EIN before those events.

What about partnerships, corporations, and nonprofits?

Partnerships, multi‑member LLCs, corporations, and nonprofits generally require an EIN because they file separate entity returns and handle payroll or information returns. An owner’s SSN or ITIN is not sufficient for the entity’s filings.

These entities commonly issue and receive information returns (e.g., 1099s) and must report employment taxes, so an EIN is foundational for compliance, banking, and vendor relationships.

Can non‑U.S. founders get an EIN without an SSN?

Yes; international applicants without an SSN or ITIN can obtain an EIN by following the IRS international applicant procedure using Form SS‑4. The IRS instructions explain the phone, fax, and mail options for foreign applicants (https://www.irs.gov/instructions/iss4).

You will list the foreign responsible party’s details on the SS‑4 and may include a foreign TIN if available. Many non‑U.S. founders use that EIN to open U.S. bank accounts and complete withholding certificates such as Form W‑8BEN‑E or W‑8BEN when receiving U.S.‑source payments.

How much does an EIN cost and how long does it take?

EINs are issued free by the IRS, and the online application issues an EIN immediately when completed during posted hours. For non‑online channels, processing times are longer.

The IRS’s online application confirms an EIN immediately (https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online). Faxed SS‑4 submissions are typically processed in about four business days, and mailed applications can take roughly four weeks; see the Form SS‑4 instructions for details (https://www.irs.gov/instructions/iss4).

How do you apply for an EIN online, by fax or mail, or by phone?

The fastest method is the IRS online application; fax, mail, and international phone applications use Form SS‑4. Prepare your legal name, responsible party information, formation details, and your reason for applying before you start.

• Online: Use the IRS “Apply for an Employer Identification Number (EIN) Online” application during posted hours; receive your EIN immediately and save the confirmation letter.
• Fax: Complete and sign Form SS‑4, fax it to the appropriate IRS fax number; expect processing in about four business days per IRS guidance.
• Mail: Complete and sign Form SS‑4 and mail it to the listed IRS address; allow about four weeks for processing.
• Phone (international applicants only): Follow the international procedure in the Form SS‑4 instructions and call during posted hours to receive an EIN at the end of the call.
• Third parties: If a designee applies, complete the third‑party designee section on Form SS‑4 so the IRS can communicate with that person.

After you obtain the EIN, retain the confirmation notice (often CP 575) for your permanent records; banks and payroll providers routinely request it.

How do you use your EIN or TIN on common tax and banking forms?

Enter your TIN on tax forms that report payments, claim exemptions, or file returns; businesses use EINs on employer and information returns, while individuals typically use SSNs. W‑9s, W‑8 forms, payroll returns, and 1099s are common places to provide your TIN.

W‑9s collect TINs for U.S. payees; sole proprietors may use an SSN or an EIN, while entities use an EIN. Foreign payees use W‑8BEN or W‑8BEN‑E and may provide a foreign TIN plus a U.S. EIN when applicable. Employers use their EIN on Forms 941 (quarterly) and 940 (annual FUTA). Banks and payment processors also request your TIN for account opening and KYC, and your federal EIN is separate from any state withholding or sales tax account numbers.

Example: A freelancer using an SSN on W‑9s later hires staff and obtains an EIN, then updates client W‑9s and uses the EIN on payroll filings and the business bank account.

How do you verify a TIN and prevent mismatches?

Use the IRS TIN Matching program to validate name/TIN combinations before filing information returns; this reduces backup withholding risk and lowers information‑return penalty exposure. Implementing proactive verification with signed forms helps prevent later notices.

Authorized payers who file Forms 1099 can register for the IRS TIN Matching program (https://www.irs.gov/tax-professionals/taxpayer-identification-number-tin-matching-program). Beyond electronic matching, ensure clean onboarding by collecting signed W‑9s or W‑8s up front, confirming legal names against formation documents, and responding promptly to B‑Notices or other IRS correspondence.

What are common mistakes with EINs and TINs and how do you fix them?

Common errors include using the wrong subtype, exposing SSNs unnecessarily, creating duplicate EINs, and name/TIN mismatches. Most problems are fixable with timely corrections and clear recordkeeping.

• Applying for the wrong subtype (e.g., using an SSN when an EIN is required): reapply or obtain the correct TIN and update client/vendor records.
• Using a personal SSN in business portals when an EIN exists: update vendor and payment profiles to the EIN.
• Creating duplicate EINs for the same entity: retain the original EIN and contact the IRS to close redundant accounts.
• Name/TIN mismatch on W‑9 or filings: verify legal name with formation documents and use TIN Matching; submit corrected W‑9s or amended returns if needed.
• Sharing identifiers insecurely: transmit W‑9s through secure channels and avoid emailing SSNs or EINs in plain text.

Retain your EIN confirmation and maintain a single source of truth for the entity’s legal name and TIN across banking, payroll, and vendor systems to prevent recurring issues.

What should you do after you get the right number?

Treat the EIN or other TIN as a core credential and use it immediately to update systems, registrations, and partners. Completing a short setup checklist prevents delays when you start operations.

• Update and send your W‑9 to clients and platforms; refresh vendor records.
• Open or update your business bank account and payment processor profile.
• Register payroll systems (EFTPS, state withholding/unemployment) before your first pay date.
• Apply for required state tax IDs and local licenses using your EIN.
• Store the CP 575 confirmation and log where your TIN is used.
• Review FinCEN BOI applicability and calendar any initial or updated filings.

Completing these steps aligns banking, payroll, licensing, and reporting around the same identifier and reduces friction and mismatch risk.

How do you change your business name or close your EIN if circumstances change?

Notify the IRS if your legal business name changes and formally close your EIN by filing final returns and sending a closing letter to the IRS; EINs cannot be transferred or reused for new entities. The IRS explains closing a business and related steps (https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business).

Report a name change according to the instructions for the type of return you file—often by including the change on your next return or sending a signed notice to the IRS. To close an EIN account, file all final returns, cancel registrations and licenses, and send a letter to the IRS requesting account closure with your EIN, legal name, address, and reason. If you misplace your EIN confirmation, check prior tax filings and bank records or contact the IRS Business & Specialty Tax Line for a verification letter (147C).