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Tax ID Numbers: A Simple Guide

By Bryce Warnes on September 12, 2019

Your tax ID number is a string of digits the IRS uses to distinguish your business from the other 28 million small businesses in the USA.

It isn’t one catch-all number, though. A few different types of ID number can fill the role of tax ID for your business.

Here’s how to tell whether you need a tax ID number, how to get one, and the different types available.

What is a tax ID number?

‘Tax ID number’—also known as a TIN—is a term used by the IRS to signify any type of number you use to identify your business.

This number can be used to file your taxes. Also, you’ll need a tax ID number to open a business account or get a loan from a bank.

Do I need a tax ID number?

If you operate a sole proprietorship without any employees, or a single person LLC, you don’t need a tax ID number to file your taxes.

All other business structures, including any businesses with employees, need tax ID numbers to file their taxes.

And, as mentioned, you’ll need a tax ID number for business banking.

Why you should get a tax ID number now

Even if you’re don’t need a tax ID number to file your taxes now (e.g., you’re currently don’t have any employees), it’s in your best interest to get one as soon as you go into business. Your best bet is to apply for an EIN.

Why the rush? Getting an EIN is free, and doesn’t take much time or effort. It gives you the freedom to grow your business in the future. When you eventually decide it’s time to open a business bank account, hire employees, or restructure your business, you’re all set. Getting a tax ID number now will save you a step later on, when your hands are full helping your business grow.

The three types of tax ID number

You may already have a tax ID number, and not even know it.

There are three types of ID number that can serve as your identification for tax purposes:

Either your SSN or ITIN can serve as your tax ID number. SSNs and ITINs both have additional uses besides tracking your business.

However, the EIN is essential if you want to hire employees. Here’s how to choose which tax ID number is right for you.

SSN as tax ID number

An SSN is the most common kind of personal ID number in the United States. Only U.S. citizens, permanent residents, and non-immigrant working residents can get SSNs.

You need an SSN to:

  • open a personal bank account
  • be hired as an employee
  • apply for a passport
  • apply for a federal student loan
  • apply for Medicare and social security benefits
  • apply for public assistance, like unemployment insurance
  • check your credit rating

How to get an SSN

The US Social Security Administration (SSA) provides SSNs. To get one, visit your local SSA office.

To apply for an SSN, at minimum you’ll need a U.S. birth certificate or a U.S. passport.

Plus, if you have one, you should also provide a U.S. driver’s license or another state-issued ID.

In the event you can’t get ahold of these documents, you may be able to provide the SSA with:

  • a health insurance card
  • a U.S. military ID card
  • a school ID card
  • an adoption decree
  • a life insurance policy
  • a marriage document (in the case of name changes)

You can provide a photocopy of any of these documents, but it needs to be verified by the issuing agency.

Still have some questions? The SSA has more info on SSN identification documents.

Using your SSN as a tax ID number

If you operate a sole proprietorship without employees, or a single-person LLC, your SSN serves as your tax ID number by default.

Already using your SSN to file business taxes? We recommend applying for an EIN. It will prepare you in advance in case you decide to hire employees or change your business structure.

ITIN as tax ID number

If you aren’t eligible for an SSN, the IRS may provide you with an ITIN instead.

Typically, you can get an ITIN if you’re:

  • a non-resident alien
  • a U.S. resident alien
  • the dependent or spouse of a U.S. citizen or resident alien
  • the dependent or spouse of a non-alien visa holder

You can only use an ITIN for tax reporting purposes. ITINs can’t be used to:

  • gain authorization to work in the United States
  • receive social security benefits
  • qualify a dependent for an Earned Income Tax Credit

How to get an ITIN

To get an ITIN, you need to submit IRS Form W-7, Application for IRS Individual Taxpayer Identification Number.

On Form W-7, you must provide:

  • current name and birth name (if different)
  • birthdate
  • place of birth
  • ID documents such as your passport, driver’s license or state-issued ID (original form or certified copies)
  • foreign status or immigration documents (original forms or certified copies)

You can submit Form W-7 in person or by mail. The IRS provides in-person locations and mailing addresses.

Using your ITIN as a tax ID number

While you can use your ITIN to file taxes for your sole proprietorship or LLC, we recommend getting an EIN. You don’t need to be a U.S. citizen to get an EIN, and it can benefit you down the line as your business expands.

EIN as tax ID number

While it’s called an ‘employer identification number,’ you don’t need to have employees already to get an EIN. In fact, you’re better off getting your EIN before you ever make a hire—it’s quick and easy to do, and once you decide to bring employees onboard, you’ll already have what you need to make it happen.

You need an EIN to file taxes if your business is:

  • a sole proprietorship with employees
  • an LLC with employees
  • a partnership, with or without employees
  • a corporation, with or without employees

Typically, you also need an EIN to:

  • open a business bank account
  • apply for a business loan
  • obtain a business license or permit
  • report and pay federal payroll taxes

How to get an EIN

Getting an EIN is quick and relatively straightforward. Check out our article on how to get an EIN.

Making changes to your Employer Identification Number (EIN)

Keep in mind that just because you have an EIN, don’t assume it’s written in stone—there are occasions when you may need to change your EIN. There are other cases where your EIN may remain the same, but you will still need to notify the IRS of changes to your business.

If you have an EIN, you need to get in touch with the IRS in the event that:

  • you change your business name*
  • you change your business address*
  • your business changes ownership
  • your business management team changes
  • your business changes entity types*

* In these circumstances your EIN doesn’t change, but the IRS still needs to be notified

If you’re unsure whether you need to notify the IRS of a change, check out their page on EIN changes.

How to notify the IRS of a business name or address change

You can let the IRS know if your business name and/or address changes when you file your tax return. How you do this varies according to the types of tax forms you file.

How to notify the IRS of a changing business entity type

To change your business entity type, file IRS Form 8832. You use the same form if you are electing a different tax status (e.g., if you are an LLC, but you would like to file as a corporation).

How to change your EIN through the IRS

For all other significant business changes, you need to request that the IRS changes your EIN.

Ideally, this should be written on company letterhead. Your letter must include:

  • your current EIN
  • your current business name
  • your current business address
  • the name of the owner and principal officer

Where to send an EIN change letter

The address you send your EIN change letter to depends on which state your business is based in.

If your business is based in:

  • Connecticut
  • Delaware
  • the District of Columbia
  • Illinois
  • Indiana
  • Kentucky
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Vermont
  • Virgina
  • West Virginia, or
  • Wisconsin

Send your EIN change letter to:

Internal Revenue Service

Stop 343G, Cincinnati, Ohio 45999

Or you can fax it to 859-669-5748.

If your business is based in:

  • Alabama
  • Alaska
  • Arkansas
  • Arizona
  • California
  • Colorado
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Iowa
  • Kansas
  • Louisiana
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Oklahoma
  • Oregon
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Washington
  • Wyoming, or
  • any place outside of the United States

Send your EIN change letter to:

Internal Revenue Service

at M/S 6273, Ogden, Utah 84201

Or you can fax it to 801-620-7116.

State tax ID numbers

In order to file a state tax return for your business, you’ll need a state tax ID number.

When your register your business with your state’s Department of Revenue, you’ll also apply for an ID number. This process varies state by state, but it’s similar to applying for a federal EIN number.

While all businesses need a tax ID number, the specific type you’ll use depends on what kind of business you run, as well as your status as a U.S. citizen, resident, or alien.

In all cases, however, the easiest approach is to apply for an EIN. It will save you work down the line, and you can use it to open a business bank account or borrow money for your business. Our article on how to get an EIN number breaks the process down into simple terms for you.


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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