What Is a Tax ID Number and When Do You Need One?

Jen Pedrozo
Anchiy / Getty Images
Anchiy / Getty Images

What is a tax ID number? A tax ID number is a unique nine-digit number issued by the Social Security Administration or the Internal Revenue Service to anyone who pays taxes.

Read More: Owe Money to the IRS? Most People Don’t Realize You Can Do This

Types of Tax ID Numbers

There are five different types of tax ID numbers. Which one you need varies based on your situation.

1. Social Security Number

The most common tax ID number for individuals is the Social Security number, or SSN. The Social Security Administration assigns a unique nine-digit SSN to all U.S. citizens when they are born. In addition to tracking income, an SSN is often used to prove your identity on medical or educational forms.

2. Individual Tax ID Number

Non-residents and resident aliens who don’t qualify for an SSN but are required to pay taxes need an individual tax ID number, or ITIN. Their spouses and dependents may also need an ITIN. The IRS issues this number, and it is not tied to an individual’s immigration status or ability to work in the United States.

An individual with an ITIN cannot claim the earned income tax credit, or EITC, on their tax return.

3. Employer Identification Number

Unlike the other tax ID numbers on this list, the IRS issues an employer identification number to businesses that pay taxes and estates and trusts with income.

4. Adoption Tax ID Number

An adoption tax ID number is a temporary tax ID number the IRS assigns to a child in the adoption process so the adoptive parents can claim them as a dependent on their taxes.

This number is valid until you inform the IRS that you’ve gotten your child’s SSN. If you don’t notify the IRS, the number expires after two years. If your adoption case is not resolved by then, you can apply for an extension.

Note that the adoptive tax ID number is used to claim the child tax credit, a common tax write-off for parents, but cannot be used to claim the EITC.

5. Preparer Tax ID Number

The IRS issues a preparer tax ID number to any paid tax preparer. The tax preparer must renew this number each year and pay a fee of $19.75.

People who commonly need a preparer tax ID number include the following:

  • Tax preparation specialists who prepare all or substantially all of a tax return in exchange for money

  • CPAs who prepare all or substantially all of a tax return in exchange for money

  • Attorneys who prepare all or substantially all of a tax return in exchange for money

  • Retirement plan agents who prepare all or substantially all of a tax return in exchange for money

Anyone who voluntarily prepares all or substantially all of a tax return does not need a preparer tax ID.

How Do I Find My US Taxpayer ID Number?

Once you have your tax ID number, guard it carefully to avoid fraud. If you do forget it, there are a few ways to find your U.S. taxpayer ID number:

  • Look at a past tax return.

  • Look at paperwork for bank accounts and other financial accounts.

  • Talk to someone else who might know it, such as a parent (in the case of an SSN) or an accountant or lawyer (in the case of any other type of tax ID number).

  • Contact the IRS directly at 1-800-829-4933. Be prepared to confirm your identity.

  • Request a new Social Security card from the Social Security Administration.

Final Take

Anyone filing a federal tax return needs a tax ID number. The Social Security Administration issues SSNs, while the IRS issues all other tax ID numbers. Keep your tax ID number in a safe place.

FAQ

Learn more about tax topics with answers to some of the most frequently asked questions.

  • Is tax ID the same as SSN?

    • For most people, their SSN is their tax ID number. A business's tax ID number is its employer identification number, while other people may use one of the following:

      • Individual tax ID number

      • Adoption tax ID number

      • Preparer tax ID number

  • What is my tax rate?

    • Income tax is variable, which means people are taxed at different rates based on their federal income tax bracket. The income brackets change annually.

    • Short-term capital gains are included in your federal income, while long-term capital gains are taxed at different rates.

  • What is FICA on my paycheck?

    • The FICA tax is a payroll deduction withheld from your paycheck. If you withhold too little, you may owe taxes, and if you withhold too much, you may receive a tax refund. If you qualify for a refund, how long it takes to get your refund varies. People who file electronically see their refund within about 21 days, while people who file by mail may not receive their tax return for a month.

Information is accurate as of Mar. 7, 2024.

This article originally appeared on GOBankingRates.com: What Is a Tax ID Number and When Do You Need One?

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