An engineering consultancy that wins its first American client usually meets two US tax numbers in the same week, decides they are roughly the same thing, and applies for the wrong one. They are not interchangeable. One belongs to a person, the other to a company, and only one of them is usually needed to get paid.
The short version
An EIN is the company’s number. An ITIN is an individual’s number, issued only to people who are not eligible for a Social Security Number but who have a US tax reason to need one. A practice billing American clients through a company almost always needs the EIN. Whether anyone in the practice needs an ITIN depends on whether an individual has a US filing obligation of their own, which is a narrower situation than most people assume.
What the ITIN is actually for
The IRS is explicit that the ITIN exists for federal tax purposes only. It is obtained with Form W-7, and the categories of people who must file one include a nonresident alien who has to file a US federal tax return, for example to report income connected with a US trade or business or to claim a refund of over-withheld tax.
Two misconceptions cost consultancies time. The ITIN does not authorise work in the United States and says nothing about immigration status. And it is not a prerequisite for the company’s EIN: an owner without a Social Security Number or ITIN can still obtain an EIN for the company, because the EIN application has a route for exactly that situation.
What the EIN does
The EIN identifies the business to the IRS. It appears on the company’s own filings, on the forms banks and payment platforms ask for, and in dealings with the state. For a consultancy, it is the number that makes the company a counterparty rather than a person with a foreign bank account.
Owners abroad cannot use the online application, which is open only when the responsible party has a Social Security Number or ITIN and the principal place of business is in the United States. The alternative is Form SS-4 by phone, fax or mail, which takes longer and should be started the same week the company is formed, because no bank or platform application proceeds without the confirmation letter. The route for applying for the company EIN without a Social Security Number is well worn and worth reading before filling anything in.
A test that settles most cases
Ask who has the obligation. If the answer is the company, because it files, banks or contracts in the United States, the EIN is the number. If the answer is a named individual, because that person has to file a US return or claim a treaty benefit personally, then an ITIN enters the picture for that person alone. Most engineering practices that design from abroad and invoice a US client find the first answer sufficient.
The professional point that paperwork cannot fix
Forming a US company does not grant the right to practise. Engineering is licensed at state level in the United States, and the authority to offer engineering services, to stamp drawings and in many states to operate an engineering firm at all rests on licensure requirements that a company registration does not touch. Firms that work through a licensed engineer of record, or that register the firm where the rules require it, stay on the right side of this. Firms that assume an LLC is a licence discover otherwise at the least convenient moment, usually when a drawing needs a seal.
Treat the entity, the tax numbers and the licence as three separate problems. They are solved by three different authorities and conflating them is the most expensive error in this area.
A workable order
Form the company and appoint a registered agent in the state. Apply for the EIN immediately afterwards, using the non-online route if no one has a Social Security Number. Open the bank and payment accounts with a consistent set of documents. Check the licensure position in the specific state where the work will be delivered, before signing. Then, and only if an individual turns out to have a personal US filing requirement, look at Form W-7.
The administrative layer can be run directly with the state and the IRS, or handed over. Most of the friction sits in one document, so a walk through how Form SS-4 is completed line by line is worth the twenty minutes before anything is sent. CORPBOLT is one of the services that handles formation, the registered agent, a US business address and the EIN application for owners outside the United States, while the tax filings and anything touching professional licensure stay with the specialists who cover those.
Two numbers, two owners, two different reasons to exist. Sorting out which one the practice actually needs takes an afternoon and saves a quarter.