Difference between Employer Identification Number (EIN) & Social Security Number (SSN)
What is an EIN?
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in the United States. It is often referred to as a Federal Tax Identification Number and is used to identify a business entity.
What is an SSN?
A Social Security Number (SSN) is a unique nine-digit number issued by the Social Security Administration (SSA) to U.S. citizens, permanent residents, and temporary (working) residents. It is primarily used to track individuals for Social Security purposes but has become a universal identifier for various government and private sector activities.
Key Differences between EIN and SSN
1. Purpose and Use
2. Issuing Authority
3. Format
4.Eligibility
5. Application Process
Conclusion
In summary, while both EINs and SSNs are nine-digit identification numbers issued by the U.S. government, they serve distinct purposes and are used in different contexts. An EIN is essential for businesses to comply with federal tax regulations and to conduct various business activities. In contrast, an SSN is crucial for individuals to access Social Security benefits, file taxes, and for personal identification in financial and employment matters. Understanding the differences between these two numbers ensures proper compliance with legal and financial requirements for both individuals and businesses.
