IRS Tax ID (EIN) Application

Does a Withholding Agent need a Tax ID (EIN)?

A withholding agent needs to understand the difference between EINs, SSNs, and ITINs thoroughly. Withholding agents are responsible for sending in withholding on behalf of an employee being paid. Often, they are third-party intermediaries between employees and companies. The agent themselves will need to have their own tax ID/EIN; many agents are payroll services that process payroll on behalf of other companies.

However, a withholding agent also needs to have the tax ID of the employees that they are paying. This could be an SSN, ITIN, or EIN, depending on the entity that is being paid. The withholding agent is not always the employer. If the agent is not the employer, the agent’s EIN is not going to be used for payroll documents. The employer is still going to need to use their own EIN for payroll documents; if they don’t have an EIN, they will need to acquire one.

Withholding agents follow certain liabilities and requirements in terms of tax IDs and should be well aware of them.