What Is a Tax Identification Number (TIN)?

A Tax Identification Number (TIN) is a nine-digit number used by the Internal Revenue Service (IRS) to identify taxpayers. Also known as a taxpayer identification number, one type of TIN includes Social Security numbers (SSNs) issued by the Social Security Administration (SSA).

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 and other government services.
• Individual Taxpayer Identification Number (ITIN): Issued by the Internal Revenue Service (IRS) to certain nonresident and resident aliens, their spouses, and their dependents when they're ineligible for SSNs. They're arranged in the same format as an SSN (XXX-XX-XXXX). The Individual Taxpayer Identification Number (ITIN) always begins with a 9. The applicant must complete Form W-7 and submit documents supporting their resident status to get an individual tax ID number.
• Employer Identification Number (EIN): Used by the IRS to identify corporations, trusts, and estates that must pay taxes. Just like SSNs, employer tax ID numbers are nine digits but they're read as XX-XXXXXXX. Those who qualify for an Employer Identification Number (EIN) must apply for and use it to report their capital gains and income for taxation purposes.
• Adoption Tax Identification Number: The ATIN applies to domestic adoptions when the adoptive parents cannot obtain the child's SSN to complete their tax returns. The child must be a U.S. citizen or permanent resident to qualify and the adoption must be pending.
• Preparer Tax Identification Number: The IRS requires a PTIN on each tax return filed. Any tax 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 identifies individuals, corporations, and entities such as nonprofit organizations (NPOs). The TIN is mandatory for anyone filing annual tax returns with the IRS and the agency uses it to track taxpayers.A taxpayer identification number is required:

• For credit: Banks and other lenders require Social Security numbers on credit applications. This information is then relayed to the credit bureaus to ensure that the right person fills out the application. The credit reporting agencies also use TINs, notably SSNs, to report and track an individual's credit history.
• For employment: Employers require an SSN from anyone applying for employment. This ensures that the individual is authorized to work in the United States. Employers verify the numbers with the issuing agency.
• For state agencies: Businesses also require state identification numbers for tax purposes to file with their state tax agencies. State taxing authorities issue the I.D. number directly to the filer.

Global TINs

Almost every country uses TINs for various reasons. Canada uses Social Insurance Numbers (SINs) for employment, tax, benefits, and credit purposes. The SIN is a nine-digit unique identifier that's formatted as XXX-XXX-XXX. Countries in the European Union also use TINs that help government agencies identify taxpayers and allow entities to invest money across the Union.

The Bottom Line

A taxpayer identification number or TIN is necessary to work in the United States and file a tax return. Individuals can get a Social Security number through the Social Security Administration or obtain an Individual Taxpayer Identification number or a number for a business directly from the IRS.