If you’re a non-U.S. resident planning to start a business in the United States or already own a U.S. LLC, you’ve probably come across the terms ITIN and SSN. While both are tax identification numbers issued by the IRS, they serve different purposes. In this article, we’ll break down the key differences between an ITIN (Individual Taxpayer Identification Number) and an SSN (Social Security Number), and explain which one you need based on your residency status and business activities.
What is an ITIN?
An ITIN is a tax identification number issued by the Internal Revenue Service (IRS) to individuals who are not eligible for a Social Security Number but need to file U.S. taxes.
Who Needs an ITIN?
- Non-U.S. residents who own a U.S. LLC or Corporation
- Foreign freelancers or e-commerce sellers doing business in the U.S.
- Dependents or spouses of U.S. citizens or residents
- Nonresident aliens required to file a U.S. federal tax return
What Can You Do With an ITIN?
As a non-resident holding an ITIN and a U.S. LLC, I’ve successfully used my ITIN to:
- Open PayPal, Stripe, and Square accounts
- File U.S. tax returns online (including 1040-NR, 5472, 1120)
- Start building U.S. credit history (varies by bank and credit card issuer)
- Apply for business bank accounts and EIN (Employer Identification Number)
What is an SSN?
A Social Security Number (SSN) is issued by the Social Security Administration (SSA) and is mainly for U.S. citizens, permanent residents, and those on certain types of work visas. It’s used for employment, social security benefits, and tax reporting.
Who Can Get an SSN?
- U.S. citizens
- Permanent residents (Green Card holders)
- Non-citizens authorized to work in the U.S. (with a valid visa)
What Can You Do With an SSN?
- Work legally in the United States
- Access government benefits
- Build a full credit profile
- Apply for personal and business credit cards
- Open U.S. bank accounts more easily
ITIN vs SSN: Side-by-Side Comparison
| Feature | ITIN | SSN |
| Eligibility | Non-U.S. residents, foreigners | U.S. citizens, residents, visa holders |
| Issuing Authority | IRS | Social Security Administration |
| Purpose | Tax reporting | Employment, benefits, tax reporting |
| Open PayPal/Stripe/Square | ✅ Yes (with U.S. LLC) | ✅ Yes |
| File U.S. Tax Returns Online | ✅ Yes | ✅ Yes |
| Build U.S. Credit History | ✅ Possible (varies) | ✅ Strongly supported |
| Employment in the U.S. | ❌ Not allowed | ✅ Allowed |
| Government Benefits | ❌ Not eligible | ✅ Eligible |
Which One Do You Need?
If you’re a non-resident business owner:
You can’t get an SSN unless you’re authorized to work in the U.S. However, you can apply for an ITIN and use it for:
- Filing your LLC’s annual tax returns
- Opening payment gateways like PayPal, Stripe, and Square
- Building trust with U.S.-based clients
- Beginning to establish a credit history
From my own experience: With just an ITIN and a U.S. LLC, I’ve successfully filed taxes online and set up payment processors used by major U.S. businesses.
If you’re eligible for U.S. work or residency:
Then getting an SSN is more appropriate as it opens broader opportunities including personal employment, full banking access, and faster credit growth.
Common Myths About ITINs
- You can’t open PayPal or Stripe with an ITIN – ❌ False
You can open these accounts if you have a U.S. business entity like an LLC. - ITINs can’t help build credit – ❌ False
Some financial institutions allow non-citizens with an ITIN to apply for secured credit cards, which is a good starting point for credit building. - ITINs are only for tax filing – ✅ Partly true
While that’s the main purpose, ITINs also unlock other tools for running a compliant U.S. business.
Final Thoughts: ITIN is the First Step for Non-U.S. Entrepreneurs
If you’re living outside the U.S. but want to legally operate and grow your business in the American market, the ITIN is your key to getting started. It allows you to stay compliant, access digital payment gateways, and take the first steps toward financial credibility in the U.S.
