For a trust or estate, the choice between an ITIN and an EIN is really a choice about who or what you’re identifying. The entity itself — the trust or the decedent’s estate — gets an Employer Identification Number, because federal rules treat it as a separate taxpayer. An Individual Taxpayer Identification Number is for a foreign person connected to that entity, such as a beneficiary, grantor, or trustee who can’t get a Social Security Number. Many cross-border situations need both: an EIN for the entity and an ITIN for each foreign individual attached to it.
Getting this wrong is expensive. Distributions to a foreign person without a valid ITIN can trigger withholding at 30 percent, and a trust or estate that never obtained an EIN can’t file the return it owes.
When the Trust or Estate Needs an EIN
Federal regulations require any trust, estate, or similar non-individual entity that must furnish a taxpayer identification number to use an EIN rather than a personal Social Security Number.1eCFR. 26 CFR 301.6109-1 – Identifying Numbers The obligation to file Form 1041 kicks in once the entity has $600 or more of gross income in a tax year, or has a nonresident alien beneficiary.2Internal Revenue Service. Instructions for Form 1041 (2025) You cannot file that return without an EIN.
The most common trigger is death. When a person dies, their estate becomes a separate taxpayer that needs its own EIN to open bank accounts, pay debts, and distribute assets through probate. A revocable trust that used the grantor’s Social Security Number during the grantor’s lifetime must also obtain a new EIN after the grantor dies, because the trust is now treated as an independent taxpayer. That requirement applies even if the trust already had a separate EIN while the grantor was alive.
An EIN is also needed whenever an irrevocable trust is created during the grantor’s lifetime and taxed as a separate entity. Any trust that holds income-producing assets and files its own return needs the number. The fiduciary who manages the entity is personally responsible for obtaining it and filing on time.
The Grantor Trust Exception
Not every trust needs its own EIN right away. A grantor trust where one person is treated as the owner of all trust income and principal can use that person’s Social Security Number, provided the trustee elects a specific reporting method: furnishing the grantor’s name, address, and SSN to all payers of income to the trust. This is common with revocable living trusts during the grantor’s lifetime. The trust essentially doesn’t exist as a separate taxpayer while the grantor is alive and in control.
The exception disappears the moment the grantor dies or the trust otherwise becomes irrevocable and taxable on its own. A new EIN is required at that point regardless of how the trust was identified before. Fiduciaries who miss the transition often discover the problem when they try to file the trust’s first standalone return.
When a Foreign Person Involved Needs an ITIN
The EIN belongs to the entity. The ITIN belongs to a person. Foreign beneficiaries, grantors, and trustees who have U.S. tax reporting obligations but cannot get a Social Security Number must obtain an ITIN.3Office of the Law Revision Counsel. 26 USC 6109 – Identifying Numbers The situation comes up frequently when a U.S. trust or estate has a beneficiary living abroad, or when a non-U.S. person creates a trust that holds American assets.
Without a valid ITIN, the fiduciary must withhold tax at the statutory rate of 30 percent on most types of U.S.-source income distributed to a foreign person.4Internal Revenue Service. Publication 515 – Withholding of Tax on Nonresident Aliens and Foreign Entities That 30 percent applies to interest, dividends, rents, and other fixed or determinable income. An ITIN allows the foreign individual to claim reduced withholding rates under an applicable tax treaty, potentially saving thousands of dollars annually. It also lets the individual file a personal U.S. tax return to report any other American-sourced income tied to the fiduciary arrangement.
So the practical rule of thumb: if any grantor, trustee, or beneficiary lacks an SSN and has any reporting or receiving role, plan on an ITIN for that person in addition to the entity’s EIN.
How to Get an EIN
The fastest route is the IRS online application, which issues the number immediately. The online tool is available to any entity whose principal place of business is in the United States or U.S. territories, and requires the responsible party’s SSN or ITIN.5Internal Revenue Service. Get an Employer Identification Number There is no fee. The IRS explicitly warns against third-party websites that charge for the service.
If you prefer paper, Form SS-4 can be faxed or mailed. Faxed applications typically produce a response within four business days; mailed applications take roughly four to five weeks.6Internal Revenue Service. Instructions for Form SS-4 – Application for Employer Identification Number The form asks for the legal name of the executor or trustee, their SSN or ITIN, the date the entity was funded, and the type of trust or estate. The person listed as the “responsible party” becomes the IRS’s primary contact for the entity’s tax matters.
Entities with no legal residence or principal place of business in the United States cannot use the online application. International applicants may instead call 267-941-1099 (not toll-free) between 6:00 a.m. and 11:00 p.m. Eastern time, Monday through Friday. The caller must be authorized to receive the EIN and answer questions about the Form SS-4. If requested, the signed form must be mailed or faxed within 24 hours.7Internal Revenue Service. Instructions for Form SS-4 International fax applications go to 304-707-9471 from outside the United States, or 855-215-1627 from within.
How to Get an ITIN
ITIN applications use Form W-7, which collects the applicant’s identity and foreign status information.8Internal Revenue Service. Instructions for Form W-7 The applicant must provide original identity documents or certified copies from the issuing agency. A valid passport is the most commonly accepted document and the only one that independently proves both identity and foreign status.
The completed Form W-7, supporting documents, and any applicable tax return are mailed to the IRS ITIN Operation at P.O. Box 149342, Austin, TX 78714-9342. Standard processing takes about seven weeks, and stretches to nine to eleven weeks during peak season (January 15 through April 30) or for overseas filers.8Internal Revenue Service. Instructions for Form W-7
Mailing an original passport overseas understandably makes people nervous. An IRS-authorized Certifying Acceptance Agent can authenticate supporting documents in person, return them to the applicant immediately, and mail only the application package to the IRS.9Internal Revenue Service. ITIN Acceptance Agents For a foreign beneficiary who needs documents back quickly, that is usually the better path.
What Happens if You Skip Either One
The consequences of operating without proper tax identification hit from several directions. The failure-to-file penalty for a late Form 1041 is 5 percent of the unpaid tax for each month or partial month the return is late, capping at 25 percent.10Internal Revenue Service. Failure to File Penalty A fiduciary who cannot file because the trust or estate never obtained an EIN does not get a pass on that penalty.
Failing to furnish a correct taxpayer identification number on information returns carries a $50 penalty per failure, up to $100,000 per calendar year.11Office of the Law Revision Counsel. 26 USC 6723 – Failure to Comply With Other Information Reporting Requirements For a trust distributing to several beneficiaries who haven’t provided valid numbers, those $50 charges add up quickly.
When a domestic payer cannot obtain a valid TIN from a payee, backup withholding kicks in at 24 percent of the payment.12Internal Revenue Service. Backup Withholding For foreign persons without an ITIN, the default withholding rate is 30 percent on most types of fixed income.4Internal Revenue Service. Publication 515 – Withholding of Tax on Nonresident Aliens and Foreign Entities Either way, the fiduciary bears the administrative burden of withholding and remitting, and beneficiaries lose access to funds that proper identification would have preserved.