On the form 1099-NEC, it asks for the Payer's TIN and will only accept numbers in the format of XX-XXXXXXX. This is the only guidance that seems to tell me my client needs a TIN whereas we have used his Soc. Sec. EIN forever.
What Publication clearly states that the Payer's TIN must be used. It's a Sole Proprietorship with no employees. It's a fishing vessel and payments to the workers must be recorded with the 1099-NET instead of 1099-MISC.
Thanks.
Wilson snipped-for-privacy@nearyou.com wrote in news:uo6ut4$1hqe5$ snipped-for-privacy@dont-email.me:
A Social Security Number has the same number of digits as an EIN. Just fill in the digits and don't worry about the dashes.
What is "it" that will only accept an EIN? The IRS form has just a blank box for the payer's TIN. There is no publication that clearly states that it has to be an EIN, but there are IRS instructions that clearly state that it can be a Social Security number (SSN). The IRS 2023 General Instructions for Certain Information Returns say the following on page 14.
"The TIN for filers of information returns, including sole proprietors and nominees/middlemen, is the EIN. However, sole proprietors and nominees/middlemen who are not otherwise required to have an EIN should use their SSNs."
So as far as the IRS is concerned it's perfectly acceptable for a sole proprietor to use a Social Security number. If you are using software that insists on formatting it as an EIN you need to contact the software provider or find different software for issuing 1099-NEC forms.
You can download the IRS instructions from this link:
The OP might also find this info re TINs helpful
Taxpayer Identification Numbers Social Security number "SSN" Employer Identification Number "EIN" Individual Taxpayer Identification Number "ITIN" Taxpayer Identification Number for Pending U.S. Adoptions "ATIN" Preparer Taxpayer Identification Number "PTIN"
My software is H&R Block Business. If I try to put a SSN in the Payer's TIN,
111-11-1111 will be recorded by the software as 11-1111111. This isn't just for this year, the software has required the latter format since 2021.I can get a TIN in the latter format from the IRS in short order. I can't imagine H&R Block hasn't heard of this 'glitch' in their software by now. Thanks.
Waitaminit. The person performing data entry MUST NOT be required to enter the hyphens. If entering hyphens is optional, then the hyphens should be removed before parsing the number to see if it's an SSN or EIN. The hyphens, which makes the number more human readable, should be used for display only. But they are not part of the number itself.
TINs that aren's SSNs are assigned from reserved blocks of numbers that aren't assigned as SSNs. A long long time ago, the first group of numbers in the SSN indicated which office had assigned the number. After Social Security card issuance was centralized in 1972, the first three digits were assigned to a specific state based on the ZIP code in the mailing address. It was a hint as to where the person was living at the time he first got a job or applied for driver's license training. The two middle digits indicated which blocks of serial numbers were available for assignment at a given time and was a vague hint about whether the number was genuine. The geographic indicator went away with randomization, starting in 2011, and the middle two digits no longer represented blocks of serial numbers that were open for assignment at a specific period of time.
Similarly, the first two digits of the EIN indicated which IRS district or key district assigned the EIN in the days in which the employer was assigned a specific office to apply to based on its location. However, if an application or return required an EIN and the employer didn't yet have one, the IRS office that received the application or return would assign an EIN out of its own pool of numbers and the employer would end up with an EIN from a different geographical pool. Due to the possibility of an employer being assigned a number from multiple offices, one could end up with more than one number. This happened to me. I had to ask for a letter from IRS instructing me to use one number and not the other number.
Today, EINs from a pool of numbers of whichever office did the work when the application was received.
But the ranges of number from which SSNs are not assigned are well known. A quick pattern match of the first five digits is sufficient to tell that the number isn't an SSN and therefore assigned by IRS. Within the ranges of numbers assigned by IRS, blocks of numbers are reserved for all the other TINs that aren't EINs assigned by IRS. ATINs and ITINs are each assigned from reserved ranges. An ATIN is used only for a dependant on an individual tax return and no where else. If it's used on a 1099, it must be rejected in software.
I can't think of a scenario in which an ITIN would appear on a 1099, but a foreign national without a visa allowing him to work (which means he's ineligible for Social Security) can receive interest belonging to someone else as a nominee.
As far as a PTIN, that is NOT a taxpayer identification number for the purpose of reporting payments, as either payee or payor, on a 1099. It appears ONLY on a tax return prepared by a third party.
Why are PTINs assigned from reserved ranges of nine-digit numbers? That's outrageous.
Yes, I know why IRS did it, as their computers were programmed to use the preparer's SSN initially, but that the number identifying the preparer should have been entered into a separate block during the transition between use of the preparer's SSN and the new identifying number. With 20-20 hindsight, obviously the preparer's SSN never should have been required to begin with for privacy reasons.
A PTIN is not a 9-digit number. It's the letter P followed by 8 numeric digits.
Bob Sandf;er
Glad to hear that they weren't assigned out of the pool of SSNs.
While there aren't supposed to be any, mistakes have happened. A quick Google search will reveal many instances of SSN/EIN overlaps.
Ira Smilovitz, EA Leonia, NJ
In the Instructions for Forms 1099-MISC and 1099-NEC (Rev. January 2024), on pg. 10, it says this and note the format:
'Recipient's TIN Enter the recipient's TIN using hyphens in the proper format. SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX format. EINs should be in the XX-XXXXXXX format.'
It is that second format, that I have been using for years, XX-XXXXXX. These EINs can be applied for at
In the next box, it asks for 'Recipient's TIN' and shows format XXX-XX-XXXX.
Obviously two different forms describing the 'TIN.' VERY CONFUSING.
Usually, I get good advice from this group, but this time, I'm thinking I'll have to rely on my own understanding. Thanks to all that tried answering my question.
The IRS Form 1099-NEC does not show any format in the boxes for Payer's TIN and Recipient's TIN. They are just blank boxes. You are looking at H&R Block's interpretation of the form or some other interpretation of the form, not the actual IRS form. If there is any confusion it is caused by whoever is adding their own embellishments to the form.
Here is a link to download the IRS Form 1099-NEC from the IRS web site.
I withdraw my comment that the nine-digit string stripped of hyphens may be parsed to determine if it's an SSN or EIN. Therefore, the H&R Block software should have used an additional character for TIN type.
Given that there are certain fields on information returns that can have either an SSN or an EIN, and the data is transmitted electronically to IRS as a 9-digit all-numeric string, then IRS itself has no method of parsing which number it is and would have to perform the name match against more than one database.
This page has a list of valid EIN prefixes and which office assigned them. There is a reserved prefix used for assignment by Small Business Administration.
SSN was first issued in 1936. I'm surprised that employers weren't first enumerated at the same time as employees.
It's not being used interchangeably. If a payment is reportable for tax law compliance, then both the payor and payee need Taxpayer Identification Numbers. An individual has a Social Security Number and a business or nonprofit or estate has an Employer Identification Number.
On payroll information returns, the data entry in the field takes the EIN for the employer or the SSN for the employee.
On information returns for non-payroll payments, almost always, a business/nonprofit/estate or an individual may appear as the payor or payee.
Hey! I'm the only one who gave the wrong answer. I thought a 9-digit string could be parsed to determine if it's an SSN or EIN, but it turns out that it cannot be. Everyone else in this thread gave decent answers.
Wilson snipped-for-privacy@nearyou.com wrote in news:uobid8$2ku8u$ snipped-for-privacy@dont-email.me:
TIN is the larger category. An EIN is one type of TIN. It's not the only type of TIN, however.
The group has always helped. It's better than staying online waiting for an answer from the IRS for up to an hour.
The IRS should use unique identifiers and they don't. I have used, without correction from the Soc. Sec. office where forms that also use the 1096 are sent to.
On the form 1099-NEC, before you get to numbered boxes, right under the Payor's address are two boxes - one on the left called 'Payor's TIN' and the second box to the right of that is the 'Recipient's TIN.
Last night, I applied for an Employer Identification Number (not my fault the box on the 1099-NEC calls it an EIN) and I got a reply after completing their questions.
They sent the notice 'CP 575 G (Rev. 7-2007);.' It contained the following:
'Date of this notice: 01-18-2024 Employer Identification Number: XX-XXXXXXX (X's entered by me to obscure the EIN) Form: SS-4 Number of this notice: CP 575 G'
Hope that helps somebody else. To get this EIN (TIN), I went to
- Wilson
According to this document, EINs and SSNs were created at the same time.
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