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What is Tax Identification Number (TIN)?

Glossary

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What is Tax Identification Number (TIN)?

What is Tax Identification Number (TIN)?

Updated on:
16 Jan, 2014
What is Tax Identification Number (TIN)?
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Employ contractors and employees in 160+ countries
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Employ and pay

global talent

starting at $199

Get started
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Employ and pay global talent starting at $199
Employ and pay
global talent

starting at
$199

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A Tax Identification Number (TIN) is a 9-digit unique identification number used by the IRS and the government for tax purposes.

The TIN serves as a way to identify taxpayers and track their tax payments. It is used in various financial transactions such as filing tax returns and opening a bank account, etc. 

Different authorities issue TINs in different countries. In the United States, for example, the TIN is commonly known as the Social Security Number (SSN) for individuals and Employer Identification Number (EIN) for businesses. In other countries, the TIN may be referred to as a National Identification Number (NIN) or Personal Identification Number (PIN).

Types of TINs

TIN stands for Taxpayer Identification Number, a unique identifier a government assigns to identify taxpayers. There are several types of TINs, including:

  1. Social Security Number (SSN): The SSN is a TIN issued by the United States government to the country’s citizens or those who are legal residents. It is primarily used for tax purposes but also serves as an identification number for many other government and financial transactions.
  2. Employer Identification Number (EIN): The EIN is a TIN issued by the IRS to companies, businesses and organizations that have employees working for them. It is used to identify employers for tax purposes, such as paying payroll taxes.
  3. Individual Taxpayer Identification Number (ITIN): What is an ITIN? It is a TIN issued by the IRS to individuals who are not eligible for an SSN. This includes  nonresidents or dependents of taxpayers. It is used for tax purposes only.
  4. Preparer Tax Identification Number (PTIN): The PTIN is a TIN issued by the IRS to individuals who prepare tax returns for compensation. It is primarily used to identify tax preparers and is required to be included on all tax returns prepared by that individual.
  5. Adoption Taxpayer Identification Number (ATIN): The ATIN is a temporary TIN issued by the IRS to individuals who are in the process of adopting a child but do not yet have an SSN or ITIN for the child. It is used for tax purposes only.
  6. State Taxpayer Identification Number (STIN): If you’re wondering what your taxpayer identification number is, it is a TIN issued by some state governments to businesses and individuals for state tax purposes. It is used to identify taxpayers within that state and may be required for filing state tax returns.

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What is the Social Security Number (SSN)?

The Social Security Number (SSN) is a unique nine-digit identification number issued by the Social Security Administration (SSA) to individuals living in the United States, including US citizens, permanent residents, and temporary residents who are authorized to work in the US.

The primary purpose of the SSN is to track an individual's earnings and eligibility for Social Security benefits. However, it is also used as a general identification number by various government agencies, financial institutions, and other organizations.

It is important to keep your SSN confidential and protect it from identity theft. You should only share it with trusted organizations and individuals and avoid giving it out unnecessarily.

What is the Individual Taxpayer Identification Number (ITIN)?

The Individual Taxpayer Identification Number (ITIN) is a tax identification number issued by the United States Internal Revenue Service (IRS) to individuals who are required to have a U.S. taxpayer identification number but are not eligible to obtain a Social Security Number (SSN).

ITINs are typically issued to nonresident aliens, foreign nationals, and their dependents who are not eligible for an SSN but have a tax filing requirement in the U.S. ITINs are also issued to U.S. residents who are not eligible for an SSN but have a tax filing requirement.

The ITIN is a nine-digit number that begins with the number "9" and is formatted like an SSN. ITINs are used exclusively for tax purposes and do not confer any legal right to work or reside in the United States.

If you have an ITIN, it is essential to ensure that you use it correctly when filing your taxes and to keep it confidential to prevent identity theft and fraud.

How to get an Individual taxpayer Identification Number (ITIN)?

To apply for an Individual Taxpayer Identification Number (ITIN), you must complete Form W-7, Application for IRS Individual Taxpayer Identification Number, and provide the required documentation to the Internal Revenue Service (IRS). Here are the steps to apply for an ITIN:

  1. Obtain Form W-7: You can download Form W-7 from the IRS website or request a copy by mail.
  2. Gather required documents: You will need to provide original or certified copies of documents that verify your identity and foreign status, such as a passport, birth certificate, or national ID card. If you are applying for an ITIN for a dependent, you will also need to provide proof of their relationship with you.
  3. Fill out Form W-7: Complete Form W-7 with accurate and complete information. Be sure to sign and date the form.
  4. Submit the application and required documents: You can submit your application and required documents by mail or in person at an IRS Taxpayer Assistance Center. If you submit your application by mail, you must send your original documents or certified copies. If you prefer to keep your original documents, you can take them to an IRS Taxpayer Assistance Center for verification.
  5. Wait for processing: ITIN applications can take several weeks to process, so be sure to apply well before any tax filing deadlines.

Once your ITIN application is approved, you will receive a letter from the IRS with your assigned ITIN. You can use this number to file your tax return and any other tax-related documents.

What is the Employer Identification Number (EIN)?

The Employer Identification Number (EIN) is a unique nine-digit identification number assigned by the Internal Revenue Service (IRS) to businesses and other entities operating in the United States for tax purposes.

An EIN is used by the IRS to identify businesses for tax reporting purposes, and it is similar to a Social Security Number (SSN) for individuals. Businesses, non-profit organizations, government agencies, and other entities that have employees, are required to obtain an EIN.

An EIN is required for a variety of business-related activities, such as opening a business bank account, filing tax returns, and applying for business licenses and permits. It is also required when hiring employees and withholding taxes from their wages.

To obtain an EIN, businesses can apply online through the IRS website, by mail or by fax by completing Form SS-4. The application process is free of charge, and businesses can usually obtain their EIN immediately after completing the online application or within a few weeks of submitting the paper application.

US Tax Identification Numbers for non-US citizens

Non-US citizens who are required to file US tax returns or who have US tax obligations but are not eligible for a Social Security Number (SSN) can apply for an Individual Taxpayer Identification Number (ITIN) or an Employer Identification Number (EIN) as appropriate.

It is important to note that non-US citizens and non-US entities may be subject to special tax rules and reporting requirements in the US, and it is recommended that they consult with a tax professional or attorney to ensure compliance with US tax laws.

File taxes compliantly with Skuad

When hiring across the United States, it is vital to accurately calculate and submit your business taxes and stay compliant while calculating, withholding, and paying employee taxes. Making mistakes with the IRS can lead to severe consequences. If you employ remote workers globally, following each country's tax laws and legislation can be overwhelming.

Skuad is a global employment and payroll platform that takes care of employment taxes for you. With localized knowledge of different countries' laws, Skuad ensures tax compliance all over the world. To know more, talk to our experts today.

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