A Tax Identification Number (TIN) is a crucial nine-digit number used by the Internal Revenue Service (IRS) to identify taxpayers. Also known as a taxpayer identification number, TINs encompass several types, including Social Security numbers (SSNs), which are issued by the Social Security Administration (SSA).
Key Takeaways
- Identification: Tax identification numbers are nine-digit tracking numbers used by the IRS.
- Issuance: Apart from SSNs issued by the SSA, the IRS handles all U.S. tax ID numbers.
- Usage: Tax filers must include their TIN on tax-related documents and when claiming benefits.
Types of Tax Identification Numbers (TIN)
- Social Security Number (SSN): The most common tax identification number issued to U.S. citizens, permanent residents, and certain temporary residents by the Social Security Administration. These numbers are formatted as XXX-XX-XXXX. The SSN is required to secure legal employment in the U.S. and to receive Social Security benefits as well as other government services.
- Individual Taxpayer Identification Number (ITIN): Issued by the IRS to certain non-resident and resident aliens, their spouses, and their dependents when they’re ineligible for SSNs. They follow the same format as an SSN (XXX-XX-XXXX) and always begin with a 9. The applicant must complete Form W-7 and submit documents supporting their resident status to obtain an ITIN.
- Employer Identification Number (EIN): Used by the IRS to identify corporations, trusts, and estates that must pay taxes. Like SSNs, these numbers consist of nine digits formatted as XX-XXXXXXX. Entities must apply for and use an EIN to report their capital gains and income for tax purposes.
- Adoption Tax Identification Number (ATIN): Applies to domestic adoptions when adoptive parents cannot obtain the child’s SSN to complete their tax returns. The child must be a U.S. citizen or permanent resident, and the adoption must be pending.
- Preparer Tax Identification Number (PTIN): The IRS requires a PTIN on each tax return filed. Any preparer who charges to complete all or part of a tax return for another individual must have and use a PTIN.
When Is a TIN Required?
A taxpayer identification number is essential for individual, corporate, and non-profit filings with the IRS. Here are some contexts in which a TIN is mandatory:
- For credit: Banks and other lenders require Social Security numbers on credit applications to ensure the correct individual fills out the application. Credit bureaus use TINs, prominently SSNs, to report and track one’s credit history.
- For employment: Employers require an SSN from job applicants to verify they are authorized to work in the U.S. These numbers are confirmed with the issuing agency.
- For state agencies: Businesses need state identification numbers for filing with state tax agencies. State taxing authorities issue these numbers directly to the filer.
Global TINs
Virtually every country utilizes TINs for tax purposes. For example, Canada uses Social Insurance Numbers (SINs) for employment, tax, benefits, and credit purposes. SINs are unique nine-digit identifiers formatted as XXX-XXX-XXX. Many European Union countries also use TINs, aiding government agencies in identifying taxpayers and facilitating cross-border investments.
Who Needs a Tax Identification Number?
Any individual seeking employment in the United States, availing of government services, or engaged in business operations must possess a valid TIN. A taxpayer identification number allows one to leverage benefits or services offered by the government, run everyday business operations, and adhere to tax obligations.
Are TINs Available Online?
The agency issuing a TIN provides individuals with an official document containing their TIN. These numbers are not made available online due to their sensitive nature.
Is a Taxpayer Identification Number the Same as a Social Security Number?
A Social Security number is one type of TIN. It enables individuals to seek employment in the United States, apply for credit with banks, and file income tax returns.
The Bottom Line
A taxpayer identification number (TIN) is indispensable for working in the United States and fulfilling tax obligations. Individuals can obtain a Social Security number through the Social Security Administration or secure an Individual Taxpayer Identification number or an Employer Identification Number directly from the IRS.
Related Terms: Social Security Number, IRS, Tax Return, Credit Reporting Agencies, NPOs.
References
- Social Security Administration. “Social Security Number & Card”.
- IRS. “Individual Taxpayer Identification Number”.
- IRS. “Employer ID Numbers”.
- IRS. “Adoption Taxpayer Identification Number”.
- IRS. “PTIN Requirements for Tax Return Preparers”.
- IRS. “Qualifying Child Rules”.
- IRS. “U.S. Taxpayer Identification Number Requirement”.
- Government of Canada. “Social Insurance Number Overview”.
- European Commission. “TIN-Taxpayer Identification Number”.
