EIN x ITIN: Understand the Differences

When opening a business, filing taxes, or regularizing your tax situation in the United States, a common question arises: EIN or ITIN? 

Although both are tax identification numbers, they serve completely different purposes.

Understanding this difference is essential to avoid errors, delays, and issues with the Internal Revenue Service.

In this article, AES Accounting clearly explains what EIN and ITIN are and when each one is required.

What is an EIN?

The EIN (Employer Identification Number) is the federal tax identification number for businesses in the United States.

It functions as the company’s tax ID and is issued by the IRS.

An EIN is required to:

• Open and operate businesses such as LLCs, S Corps, and C Corps

• Hire employees and process payroll

• Open business bank accounts

• File business tax returns

• Issue tax forms such as W-2 and 1099

  
  

In short, every business in the U.S. needs an EIN, even if it has no employees.s.

The EIN (Employer Identification Number) is the federal tax identification number for businesses in the United States.

What is an ITIN?

The ITIN (Individual Taxpayer Identification Number) is a tax identification number issued to individuals who are not eligible for a Social Security Number (SSN) but are required to file taxes in the United States.

ITINs are used by:

• Immigrants without an SSN

• Foreign investors

• Individuals earning income in the U.S.

• Spouses or dependents on tax returns

  
  

An ITIN does not authorize employment in the U.S. and does not replace an SSN. Its purpose is strictly tax related.

The ITIN (Individual Taxpayer Identification Number) is a tax identification number issued to individuals who are not eligible for a Social Security Number (SSN)

Key differences between EIN and ITIN

EIN	ITIN
Business tax identification number	Individual tax identification number
Used for LLCs, S Corps, and C Corps	Used by individuals without SSN
Required for payroll and business taxes	Required for personal tax filing
Issued by the IRS	Issued by the IRS
Linked to a business entity	Linked to an individual

Do I need an EIN, an ITIN, or both?

The answer depends on your specific situation.

You may need:

• Only an EIN, if you own a business in the U.S.

• Only an ITIN, if you are an individual required to file taxes

• Both EIN and ITIN, if you own a business and also file personal taxes

  
  

Each case requires proper analysis to ensure full tax compliance.

Common EIN and ITIN mistakes

Some common mistakes include:

• Assuming an ITIN replaces an EIN

• Opening a business without applying for an EIN

• Filing business taxes using an ITIN

• Failing to renew an expired ITIN

  
  

These mistakes can result in penalties, delays, and IRS issues.

How AES Accounting can help

AES Accounting supports clients through the entire process, including:

• EIN applications

• ITIN applications and renewals

• Strategic tax planning

• Personal and business tax filings

• U.S. tax compliance and regularizationssional

Conclusion

Understanding the difference between EIN and ITIN is essential for anyone living, investing, or doing business in the United States.

Using the correct tax identification number is the foundation of a secure and compliant tax situation.

AES Accounting. Tax clarity for confident decisions.