Key highlights
- Clarify TIN vs EIN confusion—it varies by business structure and tax use.
- Understand how a TIN ensures compliance with federal and state tax laws.
- Discover why an EIN is vital for hiring, filing taxes, or opening a bank account.
- Learn the difference between state tax IDs and EINs for sales tax obligations.
- Apply for an EIN free on the IRS website; state tax ID rules differ by state.
- Choose the right TIN—like ITIN, SSN, or EIN—for accurate tax filing and IRS compliance.
Taxes may not be the most exciting part of running a business, but they’re impossible to ignore. Whether you’re launching a startup, freelancing or expanding your company, one of the first things you’ll need is a tax ID. But here’s where things get confusing—some people call it an EIN, others say tax ID and then there’s the state tax ID. That’s where the TIN vs EIN debate begins: are they the same or do you need both?
If you’ve ever felt lost in this maze of tax jargon, you’re not alone. Many business owners struggle to understand the difference between EIN vs tax ID and when they need one (or both). The good news? It’s simpler than it sounds.
In this guide, we’ll explain everything—what a tax ID is, the differences between federal and state tax IDs and how to apply for the right one for your business.
What is a tax ID?
A tax ID is a unique number assigned to businesses and individuals for tax purposes, including filing a personal social security number tax return. It helps government agencies track tax obligations and ensures businesses operate legally. Without the right tax ID, you might face issues with banking, hiring employees or filing taxes.
Many business owners assume there’s just one tax ID, but that’s not the case. There are different types and understanding them is key to staying compliant with federal and state tax laws. This raises a common question: Is EIN the same as tax ID? Knowing the difference between an EIN vs. tax ID helps businesses meet legal requirements and avoid penalties.
Also read: Tax Rates and Exemptions
What is TIN?
A TIN stands for Taxpayer Identification Number. It is used by the Internal Revenue Service (IRS) to track tax obligations. A TIN helps in filing tax returns and other tax-related documents. It is required for both individuals and businesses.
TIN is a general term. It includes different types of identification numbers like Social Security Number (SSN), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN) and Adoption Taxpayer Identification Number (ATIN).
For individuals, the Social Security Administration (SSA) issues the SSN. The IRS provides the other types of TINs. Businesses often use the EIN, which is a type of TIN, for tax filing and hiring employees.
What is a Federal ID number or EIN?
A federal ID number, also called a federal tax identification number, is a nine-digit number issued by the Internal Revenue Service (IRS). It helps identify a business entity for tax purposes. This number is commonly known as an EIN. If you’re wondering what does EIN stand for, it stands for Employer Identification Number.
An EIN is needed to hire employees, open a business bank account and file federal tax returns. While individuals use a Social Security Number (SSN) to report personal taxes, businesses use an EIN to report business tax. It also applies to non-profits, sole proprietors, LLCs and other entities considered a separate legal entity.
What are the different types of tax IDs?
Tax IDs come in various forms, depending on who you are and what your business entities do, especially regarding tax form requirements.
Here are the most common types:
- Employer identification number (EIN) – Issued by the IRS, an EIN is required for businesses with employees, partnerships, corporations and certain LLCs. Many refer to it as a federal tax ID.
- Social security number (SSN) – Sole proprietors and freelancers often use their SSN for tax purposes instead of a separate business tax ID.
- Individual taxpayer identification number (ITIN) – Assigned to individuals who need a tax ID but aren’t eligible for an SSN, such as nonresident aliens.
- State tax ID – Required for businesses that collect sales tax or have employees, this ID is issued by state tax agencies and varies by location.
Each of these tax IDs serves a different purpose. While an EIN is often referred to as a tax ID, it’s not always the only one a business might need.
Is EIN the same as tax ID?
This is one of the most common questions business owners ask. The short answer? Yes and no.
An EIN (Employer Identification Number) is a type of tax ID, but not the only one. Think of a tax ID as an umbrella term that includes different types of identification numbers, like a TIN number, used for tax purposes. An EIN is specifically issued by the IRS for businesses, while other tax IDs, like a state tax ID, are issued by state governments.
So, when someone asks, is EIN the same as tax ID? It depends on the context. If they mean a federal tax ID, then yes, an EIN is a tax ID. But if they’re referring to state tax IDs or other tax-related numbers, then an EIN is just one type among several.
For businesses, getting an EIN is often the first step in tax compliance. However, depending on your location and business activities, you may also need a state tax ID to handle state-level taxes.
What are the differences between TIN vs EIN?
Many business owners wonder about the difference between a federal tax ID and a state tax ID. While both serve as identifiers for tax purposes, they are used in different situations and issued by different authorities.
A federal tax ID, commonly known as an EIN, is issued by the IRS. It is primarily used for federal tax filings, hiring employees and opening business bank accounts.
A state tax ID, on the other hand, is issued by state tax agencies. It is required for businesses that collect sales tax, pay state payroll taxes or have other state-specific tax obligations.
TIN vs EIN: Quick comparison table
Here’s a comparison table between TIN and EIN:
| Feature | TIN (Taxpayer Identification Number) | EIN (Employer Identification Number) |
| What it stands for | Taxpayer Identification Number | Employer Identification Number (also called Federal Tax ID) |
| Issued by | IRS and Social Security Administration | Internal Revenue Service (IRS) |
| Purpose | Used to identify individuals and businesses for tax purposes | Used specifically to identify business entities |
| Who needs it | Individuals, sole proprietors, corporations, non-profits, etc. | Businesses that hire employees or operate as a separate legal entity |
| Includes | SSN, EIN, ITIN, ATIN, PTIN | A specific type of TIN |
| Used for | Filing personal or business tax returns, receiving tax benefits | Hiring employees, opening business bank accounts, filing business taxes |
| Application process | Varies by type (SSN from SSA, others from IRS) | Apply online or by mail through the IRS |
| Cost to apply | Free | Free |
| Example use case | A freelancer filing taxes with an SSN | A company applying for payroll taxes using an EIN |
Now that you know about the difference between EIN and TIN, find out how they differ when it comes to application.
TIN vs EIN: How to apply for them?
Getting a tax ID for your legal entity is a crucial step in setting up your business, especially if you require a separate tax entity. But remember, before applying, you should know the difference between EIN vs tax ID, as some businesses may need both an EIN and a state tax ID. Whether you need a federal EIN, a state tax ID or both, the process involves a few simple steps. Here’s how you can apply.
How to apply for EIN?
An EIN (Employer Identification Number) is issued by the IRS and is required for businesses that have employees, operate as a corporation or partnership or need to open a business bank account with financial institutions. If there are changes in your business name or other details, you might need to apply for a new EIN. Follow these steps to apply:
- Determine your eligibility – Your business must be located in the U.S. or its territories and the applicant must have a valid Social Security Number (SSN) issued by the Social Security Administration (SSA) or Individual Taxpayer Identification Number (ITIN).
- Apply online through the IRS website – The fastest way to get an EIN is through the IRS’s online application portal. Once submitted, you receive your EIN immediately.
3. Apply by mail or fax – If you prefer, you can fill out Form SS-4 and send it to the IRS via mail or fax. This method typically takes a few weeks to process, often requiring about 4 business days for fax processing.
4. Apply by phone (for international applicants) – Businesses outside the U.S. can apply for an EIN by calling the IRS.
How to apply for a TIN?
A state tax ID is necessary if your business collects sales tax, has employees or is subject to state-level business taxes. The process varies by state but generally involves:
- Checking state requirements – Visit your state’s tax agency website to determine if your business needs a state tax ID.
- Registering your business – Before applying for a state tax ID, you may need to register your business with the state, which could involve getting a business license.
- Filing an application – Most states allow online applications, while some may require mail-in forms. Processing times and fees vary.
- Receiving your state tax ID – Once approved, you’ll get a unique tax ID for state tax purposes.
Why a professional website matters for your business?
Applying for tax IDs is just one part of setting up a business. To build credibility and attract customers, you need an online presence while ensuring that sensitive information is protected. A professional website makes your business look legitimate and helps potential customers find you easily.
How does Bluehost help with your online presence?
Once you have your EIN and state tax ID, the next step is building an online presence. With Bluehost WordPress hosting, you can easily set up a professional website, helping your business appear more credible and accessible to customers. Bluehost offers easy-to-use tools, domain registration and reliable hosting to get your website up and running quickly.
Here’s what Bluehost offers with its WordPress hosting:
- Free domain name for the first year to establish your brand online
- One-click WordPress installation for easy setup, even for beginners
- Automatic WordPress updates to keep your site secure and current
- 24/7 customer support for technical help anytime you need it
- Free SSL certificate for secure browsing and customer trust
- Custom WordPress themes to match your brand’s look and feel
- Scalable hosting plans that grow with your business needs
- Marketing tools and SEO features to help boost your site’s visibility
- Integrated email hosting to set up professional business email addresses
With Bluehost, your business can go from EIN registration to a polished digital presence in just a few clicks.
Also read: How to Create a WordPress Website in 2025: A Practical Guide
TID vs EID: What are the common misconceptions?
Many business owners mistakenly believe “Is EIN the same as tax ID?” has a simple yes-or-no answer, but the reality depends on the type of tax obligations. Capgemini reports that approximately 40% of small businesses experience delays in compliance due to misunderstandings about federal and state tax ID The EIN vs tax ID confusion often leads businesses to apply for the wrong identification number, causing delays. Misunderstanding these numbers can lead to tax filing mistakes or compliance issues. Let’s clear up some common myths.
- An EIN and a state tax ID are the same
Many assume that once they have an EIN, they don’t need a state tax registration or state tax ID. However, these are two separate numbers. An EIN is issued by the IRS for federal tax purposes, while a state tax ID is issued by state agencies for state-specific taxes like sales tax or payroll tax. Depending on your business activities, you may need both.
- Only large businesses need an EIN
Even if you’re a sole proprietor or a freelancer, you might need an EIN. If you hire employees, plan to open a business bank account or want to build business credit, having an EIN will be beneficial.
- You need to pay to get an EIN
Some third-party services charge fees to apply for an EIN, leading people to believe it’s a paid service. In reality, applying for an EIN through the IRS is 100% free. Be cautious of websites that try to charge you.
- A state tax ID is required in every state
Not all businesses need a state tax ID. If your business doesn’t collect sales tax or have employees, you may not need one. Requirements vary by state, so always check with your local tax agency.
- EINs and state tax IDs expire
An EIN does not expire and stays with your business permanently. However, a state tax ID may need renewal depending on state regulations, especially if your business structure or tax obligations change.
Understanding these misconceptions ensures you stay compliant and avoid unnecessary confusion while setting up your business.
Final thoughts
Getting the right tax IDs keeps your business compliant and running smoothly. An EIN handles federal taxes, while a state tax ID covers state-level obligations. Having both, if needed, helps you avoid legal issues.
But tax compliance isn’t enough—you also need a strong online presence. A professional website builds trust and attracts customers.
With Bluehost AI website builder, you can easily create a stunning, professional site—no tech skills needed. Whether it’s a simple blog or a full-fledged store, Bluehost helps your business grow and stand out online.
FAQs
Not exactly. An Employer Identification Number (EIN), also called a federal employer identification number (FEIN). It is a specific type of Taxpayer Identification Number (TIN) issued by the Internal Revenue Service (IRS) for federal tax purposes.
The term “tax ID” is broader and can refer to various identification numbers used for tax obligations, including Social Security Numbers (SSN), Individual Taxpayer Identification Numbers (ITIN), and state tax IDs.
An EIN is a unique nine-digit number assigned to business entities to file taxes, open business bank accounts, and comply with federal tax laws. Unlike other TINs issued to individuals, the EIN specifically identifies business entities for tax reporting and other tax-related documents.
Your need for an EIN and a state tax ID depends on your business structure and tax obligations. If your business hires employees, withholds taxes, or collects sales tax, you will likely require both.
1. EIN (Employer Identification Number): This is your federal tax ID number issued by the Internal Revenue Service (IRS). It is used for federal tax filings, opening business bank accounts, and managing federal tax obligations.
2. State Tax ID: Issued by your state’s tax agency, this number is necessary to pay state taxes, such as payroll and sales tax, and to comply with state tax registration requirements.
Using an EIN alone is not sufficient for state tax purposes, as state tax IDs are separate and specific to each state’s tax laws.
No, a federal employer identification number (EIN) is valid only for federal tax purposes. State tax agencies issue separate state tax ID numbers to manage payroll taxes, sales taxes, and other state-specific business tax obligations. Each state tax ID is unique to the issuing state and is required in addition to the EIN for compliance with state tax laws.
You can apply for an EIN (Employer Identification Number), a unique nine-digit federal tax identification number, free of charge on the IRS website. The application process is quick and straightforward, typically providing your EIN immediately upon completion. For a state tax ID, you must apply through your state’s tax agency or appropriate IRS office, as requirements and procedures vary by state.
A website makes your business look professional and helps attract customers. With Bluehost website builder, you can create an easy-to-manage site, whether you’re running a small business or an online store.
Many sole proprietors use their Social Security Number (SSN), a type of Taxpayer Identification Number (TIN), to file income tax returns if they have no employees and operate without a separate tax entity.
However, an Employer Identification Number (EIN) is required when a sole proprietorship hires employees, opens a business bank account, applies for business loans, or wants to separate personal and business finances. Obtaining an EIN ensures compliance with Internal Revenue Service (IRS) regulations and facilitates proper tax reporting for the business entity.
An EIN is required when a business:
– Hires employees and must withhold taxes and report payroll.
– Operates as a corporation, partnership, or single-member LLC treated as a separate entity.
– Files specific business tax returns, such as excise, alcohol, or tobacco taxes.
– Applies for tax-exempt status or manages a tax-deferred pension plan.
– Needs to open a business bank account or apply for business loans.
Applying for an EIN is simple, free, and can be done online through the official IRS website:
– Access the IRS EIN application portal.
– Complete the online form, including details about your business structure and the responsible party.
– Receive your unique nine-digit number immediately upon verification, which you can download and print for your records.
Yes.
– Individuals who are non-resident aliens and are not eligible for an SSN can apply for an Individual Taxpayer Identification Number (ITIN) for tax reporting.
– Non-resident aliens who form a U.S. business entity, such as an LLC or corporation, can obtain an EIN to comply with U.S. tax laws and open a business bank account.
The IRS issues several types of Taxpayer Identification Numbers (TINs), each serving distinct purposes for tax compliance:
1. Social Security Number (SSN): Assigned by the Social Security Administration to U.S. citizens and eligible residents for tracking social security benefits and individual tax obligations.
2. Individual Taxpayer Identification Number (ITIN): Issued by the IRS to non-resident aliens and others who are not eligible for an SSN but require a tax identification number to file taxes.
3. Employer Identification Number (EIN): A unique nine-digit federal tax identification number issued by the IRS to business entities, including limited liability companies, corporations, partnerships, and other entities. The EIN is essential for businesses to file tax returns, open business bank accounts, hire employees, and comply with federal tax laws.
No, there is no difference between a FEIN and an EIN. Both terms refer to the same nine-digit number issued by the IRS to identify a business entity for tax purposes. “FEIN” stands for Federal Employer Identification Number, while “EIN” stands for Employer Identification Number. They are interchangeable terms used in the context of business tax identification. This clears up the common confusion in the FEIN vs EIN debate.
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