What is the difference between ITIN and EIN and how to obtain each
There are several numbers that we use to identify ourselves and our business, whether we own companies or an individual business, Such as the passport and driver’s license number and in the United States of America there is an SSN for individuals, Commercially there are numbers such as EIN and ITIN number, The difference between ITIN and EIN is unclear to many and about how to obtain the tax identification number for many of those who intend to establish companies in America or even those who recently established companies in the United States, I wrote this article to find out the difference between these tax numbers due to the large number of types of tax numbers and tax forms out there.
We will try to explain these numbers briefly and explain the difference between them, And explain what ITIN and EIN are, and I will explain how to obtain ITIN so that you will be able to obtain a US tax number and you have full information about it.
What is the difference between ITIN and EIN
What does IRS mean?
It is an acronym for Internal Revenue Service.
What is EIN?
It is an acronym for Employer Identification Number, which means an identification number for companies and institutions in the United States, This number is a Federal Identification Number used by the IRS to administer tax laws in the country. So the EIN is the social security number or the tax number for the company and not for individuals, It can be obtained whether you are a resident of America or not yet to set up a company remotely.
What is the benefit and why do I need an EIN?
According to the IRS Act 1974, all companies in the United States must have an EIN. When launching a new company or operating a company primarily located in the United States, Or an agricultural cooperative, Or a non-profit organization, Or owning real estate or investing in real estate. The benefits of obtaining an EIN are summarized as follows:
- The ability to open a US commercial bank account and conduct banking transactions in the United States.
- The ability to file and pay tax returns to the IRS if your company is not tax exempt.
- The ability to buy real estate of all types, residential and commercial, on the company’s name.
- The possibility of employing employees and workers from within the United States of America.
- The possibility of obtaining a customs number for import and export in America.
- The possibility of selling on Amazon America and other similar companies with the Fullfilment system.
- The ability to legally sign contracts and conduct business deals with American companies and protect your rights.
How to submit an EIN application for non-residents of America
Obtain an Article Of Organization
This is the easiest step and you can take it through a registered agent and request service for $ 230 from a company JumpStart Filings With this step, you are considered to have a company in America in your name.
Download and fill out the SS4 form
Download form SS4 You will need a US Social Security number SSN Or the address of a US registered agent Registered Agent US Address If you do not have one, you can do so by contacting JumpStart Filings He can do everything on your behalf for only $ 120, including applying to open a bank account.
Mail your SS4 form to the IRS
You find addresses US IRS You will send the form to her by regular mail, as well as your agent registered in the previous step for free.
Waiting for an acceptance or rejection of the IRS response
The processing and study time of your application takes a few weeks, after which you will receive a letter of approval, If the request to obtain an EIN is rejected, You can try again. Usually the registered agent is the one who assumes this task also for free.
Notice: If you are located in America and do not have a US Social Security number or US residency address, you will be required to provide a copy of your passport or US federal government ID granted to the person listed as the Person Listed as the Responsible Party
Notice: It is preferable that you appoint a specialized agent on your behalf to assist you in completing the application procedures for obtaining an EIN with a high acceptance rate, and some of them provide guarantees of acceptance. Such as JumpStart Filings They make sure that the SS4 application is prepared and submitted correctly to ensure timely approval of the EIN.
If they find any mistake, the IRS responds to correcting it directly. So, you will be allowed to focus on setting up your own company in America instead of on getting a US tax number. I recommend this comprehensive package from scratch until a US $ 431 bank account is opened with no other hidden charges.
What is ITIN?
Abbreviation for Individual Taxpayer Identification Number, ITIN was created by the IRS in 1996 to allow foreign nationals and other individuals ineligible for an SSN to comply with US tax laws. No matter where they are located in or outside the United States.
Who is Eligible for ITIN?
After I found out that ITIN is an SSN, We will now learn about the categories eligible for it:
- Non-US Residents who invest in or own shares in an American company and obtain revenue from it.
- Foreign residents of the United States, their wives, and children, Who cannot obtain an SSN.
- Groups who do not qualify for an SSN.
- Illegal immigrants to the United States of America and want to work there.
- Foreign students who are legal residents of America.
- Spouse or dependents of a US citizen.
- The dependents or spouse of a person who is a permanent resident of America.
- The dependents or spouse of a foreigner holding a Temporary Visa.
What is the benefit and why should I obtain ITIN?
If you are a foreigner living or not residing in the United States:
- Obtaining an address in the USA (your address or the address of a registered agent).
- Obtain a US driver’s license, It is used as legal US proof of identity.
- Opening a personal bank account in the United States.
- Build your own personal credit record in America.
- The possibility of obtaining a green card SSN in the future.
An ITIN holder is not eligible for:
- Tax benefits and public benefits that US citizens and other taxpayers can obtain.
- Earned Income Tax Credit (EITC) and Social Security Benefits.
- Obtaining ITIN is not considered a work permit or authorization to work on an I-9 Work Authorization Form.
- ITIN cannot be used to establish legal presence in the United States or to legalize immigrants.
- Under CARES, ITIN holders are not entitled to receive stimulus payments even if they file their federal tax returns.
Does ITIN have a validity period?
Yeah. According to a law enacted by Congress in 2015, after obtaining ITIN, ITIN revisited every 5 years, If you have an ITIN but have not used it for 3 consecutive years, it will expire and you will need to re-request it. Its use is through the annual IRS tax return.
Is ITITN a way to track down illegal immigrants?
It is not considered as such. Because ITIN is to make it easier to pay taxes, The IRS does not share information about ITIN holders or ITIN applicants with the US immigration office. Out of respect for the privacy of taxpayers according to Article 6103, with exceptions:
- However, personal information related to tax administration may be provided to the US Treasury.
- If there is a court order related to a non-tax criminal investigation against an ITIN holder, the IRS will share the information with judicial authorities and federal police.
How to get ITIN?
How to obtain ITIN is not a very complicated process, but you have to pay attention to the details and it is better to use a specialized agency:
- Fill W-7 application form Mail it to the IRS by regular mail.
- After approval of your request for an ITIN, it will be mailed to you.
- over there 13 documents are required In order to obtain from them ITIN documents proving your foreign status.
- These documents are returned to the applicant within 60 days of receiving Form W-7
- To obtain an ITIN, you do not need to apply to the tax authority in person.
To you ITIN Handbook In PDF format issued by the American Immigration Council.
To conclude After you know what is the difference between ITIN and EIN and how to obtain each of them, I advise you to read the complete information about working in the states in America remotely and establishing a company in America.
The most important sources: