SSN vs. EIN vs. ITIN: Business Owner’s Guide to Taxpayer Identification Numbers

Tax IDs are one of those things you deal with constantly, but nobody really explains them properly. SSN for this person, EIN for that business, ITIN for the foreign contractor, and if you mix them up, you just create more work for yourself later.

I’ve been dealing with tax ID questions for years, from clients switching business structures to foreign contractors with expired ITINs. The same scenarios keep coming up, and most of the confusion comes from not understanding when to use which ID type.

This guide covers the practical differences between SSN, EIN, and ITIN, when each one applies, how to get them, and the verification steps that keep your tax reporting accurate.

And, if you are running short on time, here’s a quick rundown (it’s preferred to read all specifics).

Summary of differences between SSN vs. EIN vs. ITIN

In the sections that follow, we'll break down the specific differences between each pairing: SSN vs. EIN, SSN vs. ITIN, and EIN vs. ITIN. We'll examine their unique format structures, how the application and expiration processes differ, and the distinct compliance obligations each one carries, so you know exactly which tax ID to use in every situation.

What’s the difference between SSN and EIN?

SSN and EIN both come in a 9-digit format, but they serve completely different purposes in the tax system. An SSN identifies individual taxpayers, while an EIN exists exclusively for business entities.

The simplest way to think about it:

• SSN = you as a person.
• EIN = your company as a separate legal entity.

Format and identification differences

SSNs follow the XXX-XX-XXXX format (like 123-45-6789), while EINs use XX-XXXXXXX (like 12-3456789).

EINs have a two-digit prefix followed by a hyphen, while SSNs have a three-digit prefix. When reviewing tax documents, this format distinction helps you quickly identify whether you're dealing with personal or business identification.

SSNs are issued by the Social Security Administration and appear on Social Security cards, while EINs come from the IRS and are provided through a confirmation letter or online application confirmation.

Application and expiration differences

SSNs are automatically issued to U.S. citizens at birth or upon immigration for authorized residents, requiring Form SS-5 to be submitted to the Social Security Administration. EINs must be actively applied for when starting a business.

• SSN Application: Submit Form SS-5 with proof of identity, citizenship/immigration status, and age to any Social Security office. Processing takes 2-4 weeks. Free of charge. Never expires and remains with you for life.
• EIN Application: Apply online at IRS.gov (instant approval) or submit Form SS-4 by mail/fax (4-6 weeks processing). Free of charge. Never expires, even if the business becomes inactive.
• Key Difference: SSNs require physical document submission and in-person verification for first-time applicants. EINs can be obtained entirely online with immediate issuance for domestic applicants.

"Each of our 12 locations was verifying tax IDs differently. Some checked, some didn't, some waited weeks for confirmation. We had zero consistency and couldn't tell you who was actually verified. We brought in Signzy six months ago to standardize everything. Now every location follows the same process, and I can pull verification records for any vendor in any state within seconds." — VP of Operations, Financial Services Business.

Compliance obligations

💼 Business Structure Requirement: If you hire even one employee or operate as a partnership/corporation, you must obtain an EIN. Using your SSN is no longer compliant.

🔒 Privacy Protection: Using your SSN for business purposes exposes your personal identification to every vendor and client. An EIN shields your SSN from unnecessary exposure.

🏦 Banking Compliance: Most banks require an EIN to open business accounts and establish business credit separate from personal credit history.

📋 Tax Filing Obligations: SSN holders file individual returns (Form 1040). EIN holders must file business returns (Form 1120, 1065, or 1120-S, depending on structure) plus applicable state and payroll tax returns.

⚠️ Misuse Penalties: Using an SSN when an EIN is required can result in rejected tax filings, delayed refunds, and IRS correspondence requiring correction.

🔄 Change Management: You cannot transfer an EIN to another business or person. If your business structure changes significantly (sole prop to corporation), you may need a new EIN. Your SSN never changes regardless of life circumstances.

What’s the difference between SSN and ITIN?

The fundamental difference between SSN and ITIN comes down to work authorization and residency status.

An SSN is issued to U.S. citizens, permanent residents, and certain visa holders authorized to work in the United States. An ITIN is specifically for individuals who have U.S. tax obligations but don't qualify for an SSN. Primarily foreign nationals and non-resident aliens.

Format and identification differences

Both use the nine-digit XXX-XX-XXXX format, but ITINs are immediately recognizable because they always begin with the number 9 and have a 7 or 8 in the fourth digit position (like 9XX-7X-XXXX or 9XX-8X-XXXX). SSNs never follow this pattern. They use various number combinations across all positions but avoid the 9XX-7X and 9XX-8X patterns.

When processing contractor payments or vendor documentation, this visual check instantly tells you whether you're working with a U.S. authorized worker (SSN) or a foreign individual (ITIN).

Both are issued as nine-digit numbers, but only SSNs come with a physical Social Security card bearing the number.

Application and expiration differences

SSNs and ITINs have dramatically different application processes and lifecycles. SSNs are permanent, while ITINs require active maintenance.

• SSN Application: U.S. citizens receive SSNs through birth registration or via Form SS-5 submitted to Social Security offices. Requires proof of U.S. citizenship or authorized immigration status. Processing takes 2-4 weeks. Once issued, it is valid for life without renewal.
• ITIN Application: Submit Form W-7 to the IRS with original identification documents (passport, national ID) or certified copies from issuing agencies. Must include a valid reason for needing an ITIN (usually attached to a tax return). Processing takes 7-11 weeks, longer during peak season. No fee for application.
• Expiration: ITINs expire after three consecutive years of not being used on a federal tax return. Additionally, older ITINs have undergone rolling expiration schedules. Renewal requires resubmitting Form W-7 with documentation.
• Key Difference: SSN is a lifelong number requiring no maintenance. ITINs demand active management, verification before each use, and periodic renewal, creating an ongoing administrative burden.

Compliance obligations

🚫 Work Authorization: An ITIN explicitly does not authorize U.S. employment. You cannot hire an ITIN holder as a W-2 employee; only SSN holders can be legally employed in the U.S.

📄 Form Requirements: ITIN holders receive 1099 forms for contractor payments. SSN holders can receive either W-2s (employees) or 1099s (contractors), depending on their working relationship with you.

🔍 Verification Burden: Before processing payments to ITIN holders, verify the ITIN hasn't expired. Expired ITINs cause payment delays and rejected tax filings.

💰 Withholding Obligations: Foreign contractors with ITINs may be subject to 30% backup withholding unless they qualify for tax treaty benefits and provide proper documentation.

⏰ Timeline Management: If your foreign contractor's ITIN expires mid-year, build in 7-11 weeks for renewal before year-end tax reporting deadlines.

🔄 Transition Tracking: When an ITIN holder gains work authorization and receives an SSN, you must update all records. The IRS requires notification to transfer tax history from ITIN to SSN.

📋 Documentation Standards: ITIN applications require significantly more supporting documents than SSN verifications. Keep copies of ITIN confirmation letters and renewal documentation for audit trails.

What’s the difference between EIN and ITIN?

EIN and ITIN serve completely different taxpayers in the system. One identifies business entities, the other identifies individuals without SSN eligibility.

An EIN is assigned to businesses, partnerships, corporations, and LLCs for entity-level tax reporting. An ITIN is assigned to foreign individuals who need to report personal income or claim personal tax benefits but don't qualify for a Social Security Number.

Format and identification differences

EINs use the XX-XXXXXXX format with a two-digit prefix (like 12-3456789), making them instantly distinguishable from the XXX-XX-XXXX format used by ITINs and SSNs. ITINs specifically start with nine and have 7 or 8 in the fourth position (9XX-7X-XXXX or 9XX-8X-XXXX), while EINs can use any number combination in their two-digit prefix.

When reviewing tax forms, this structural difference is your first clue about whether you're dealing with a business entity (EIN) or an individual foreign taxpayer (ITIN).

EINs appear on business formation documents, bank statements, and business tax returns, while ITINs appear only on individual tax returns and personal contractor agreements.

Application and expiration differences

The application complexity and permanence differ dramatically between these two tax identifiers. EINs are straightforward and permanent; ITINs are complex and require maintenance.

• EIN Application: Apply online at IRS.gov with immediate approval for U.S.-based businesses, or submit Form SS-4 by mail/fax. Foreign applicants must call the IRS international line or mail Form SS-4. Requires business formation details but minimal identity documentation. Processing ranges from instant (online) to 4-6 weeks (mail). Free of charge.
• ITIN Application: Submit Form W-7 to the IRS with original passport or certified copies from issuing agencies, plus a valid reason for needing the ITIN (usually a tax return or treaty claim). No online application option. Must demonstrate foreign status and U.S. tax obligation. Processing takes 7-11 weeks minimum. Free of charge, but document certification may cost money.
• Expiration: EINs never expire, remaining valid even if the business becomes inactive for years. ITINs expire after three consecutive years without use on a federal tax return and require renewal via resubmission of Form W-7.
• Key Difference: EIN is a one-time application providing a permanent business identifier. ITIN requires ongoing verification, potential renewal, and active status management throughout the business relationship.

Compliance obligations

🏢 Entity vs. Individual: Use EINs for payments to businesses (partnerships, corporations, LLCs). Use ITINs for payments to foreign individuals working as independent contractors.

👥 Foreign Business Owners: A foreign national operating a U.S. LLC needs both an EIN for the LLC's business activities and an ITIN for personal tax reporting when business income passes through to them.

📋 Form Selection: EIN holders receive 1099-NEC or 1099-MISC depending on payment type. ITIN holders (individuals) receive 1099-NEC for contractor payments. Foreign entities may require Form 1042-S instead.

💼 Banking Requirements: EINs are required for U.S. business bank accounts. ITINs alone won't open business accounts. They're for individual tax reporting only.

⚠️ Misclassification Risk: Requesting an ITIN from a foreign corporation is incorrect. They should provide their foreign tax ID and Form W-8BEN-E. Confusing entity vs. individual requirements causes processing delays.

🔍 Dual ID Scenarios: When contracting with foreign-owned U.S. businesses, verify you're collecting the EIN for the business entity, not the owner's personal ITIN, unless you're paying the owner directly as an individual.

"A vendor invoiced us for six months under a fake EIN before we caught it during annual 1099 prep. Cost us a big penalty and a full compliance audit. We were furious and terrified it would happen again. Since using Signzy, we verify every single vendor before the first payment goes out. Haven't had a single fraudulent vendor in 22 months." — CFO, Regional Credit Union

SSN vs EIN vs ITIN: Which Tax ID do you need?

🟢 You're a sole proprietor who just hired your first employee or contractor → Get an EIN immediately. The moment you have payroll obligations or issue 1099 forms, the IRS requires an EIN for reporting. Your SSN no longer cuts it.

🟢 You're forming an LLC with just yourself as the member → You can use your SSN if you haven't elected corporate tax treatment and have no employees. Most business owners still get an EIN for banking purposes and to keep personal and business finances separate.

🟢 You're forming an LLC with multiple members → You must get an EIN. Multi-member LLCs are taxed as partnerships by default, and partnerships require EINs regardless of employee status.

🟢 You're incorporating as an S-Corp or C-Corp → EIN is mandatory. Corporations are separate legal entities that must have their own tax identification numbers from day one.

🟢 You're forming a partnership with other business owners → Get an EIN before you start operating. Partnerships file Form 1065 and need an EIN to open bank accounts, sign contracts, and establish the business entity.

🟢 You're a foreign national starting a U.S.-based business → Apply for an EIN for the business entity. If you'll receive pass-through income (like from an LLC), you also need an ITIN for your personal tax reporting.

🟢 You're a U.S. business hiring a foreign contractor → Collect the contractor's ITIN (if they're an individual) or their foreign tax identification number plus Form W-8BEN (if they're a foreign entity). You'll use your EIN to report the payments.

🟢 You're operating multiple businesses under different structures → Each separate legal entity needs its own EIN.

🟢 You're buying an existing business → You need a new EIN for the acquired business. EINs can't be transferred between owners. Even if you're keeping the same business name and operations, the change in ownership triggers the need for a new tax ID.

🟢 You're a foreign investor receiving dividends from a U.S. company → You need an ITIN to report the dividend income and potentially claim tax treaty benefits. The company paying you uses its EIN, but you need your own individual tax ID.

🟢 You're converting from sole proprietor to an LLC or corporation → Apply for an EIN for the new entity structure. Your old sole proprietor income reported under your SSN and your new business income reported under the EIN will exist simultaneously during the transition year.

🟢 You're a non-resident alien with no U.S. business but U.S. income sources → Get an ITIN. If you're receiving royalties, rent, or other U.S.-source income that requires tax filing, the ITIN lets you report and potentially reduce withholding through treaty claims.

🟢 You had an EIN for a business you closed five years ago, and now you're starting a new venture → Apply for a new EIN. The old EIN is permanently tied to the closed business. You can't reactivate it or transfer it to your new operation.

🟢 You're operating a trust or estate that generates income → Get an EIN for the trust or estate. These entities file their own tax returns (Form 1041) and need separate tax identification from the individual trustees or beneficiaries.

How can Signzy help you streamline Tax ID verification?

All these Tax IDs exist for one basic reason: so people and businesses can identify each other in a system everyone trusts. The government issues these numbers to verify who you are and then turns around and expects you to verify everyone else using the same system.

It’s actually pretty clever when you think about it. The same infrastructure that lets the IRS know your business is legit also puts you on the hook to check that your employees, contractors, and vendors are who they say they are. You're basically part of the verification network, whether you like it or not.

👉 SSN Verification

Verify employee SSNs against Social Security records during onboarding to catch identity fraud and prevent W-2 filing errors. The SSA's SSNVS system processes verifications in batches with turnaround delays that slow down your hiring process.

🎯 Signzy Advantage: Instant SSN verification that checks if the number matches the applicant's name and address history, confirms the SSN wasn't issued to a deceased individual or before the applicant's birth date, and flags high-risk addresses. Integrate directly into your onboarding workflow and verify in real time instead of waiting on batch processing.

"Our payroll processor flagged eight mismatched SSNs in one quarter, which triggered an IRS inquiry and delayed everyone's W-2s. Turns out our onboarding team was just trusting whatever people wrote on their applications. We brought in Signzy to verify upfront, and have cut our SSN-related compliance incidents by ~95% since then." — Payroll Director, Investment Banking Firm.

👉 EIN Validation

Confirm vendor EINs match IRS business records before processing payments to avoid backup withholding and rejected 1099 filings. The IRS TIN Matching Program only runs during specific filing windows each year, leaving you blind when onboarding vendors outside those periods.

🎯 Signzy Advantage: Year-round EIN validation with access to 30+ business data points sourced directly from official records across all 50 states. Verify EINs instantly during vendor setup, get detailed company information, including business name, address, license status, and liens, and eliminate the months-long gap between onboarding and verification.

Official verification channels handle basic needs effectively, but they weren't designed for businesses running continuous onboarding cycles. When you're scaling hiring, expanding vendor relationships, or managing seasonal workforce surges, verification needs to happen in real time. That’s where Signzy can help.

Signzy provides SSN, EIN, and ITIN validation at the speed your business actually operates.

Book a demo to see what verification looks like at scale.