What is an EIN?
An Employer Identification Number (EIN), also known as a Tax Identification Number (TIN) or Federal Employer Identification Number (FEIN), is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States. This number is essential for various business activities, including tax filing, hiring employees, and opening business bank accounts.
Who Needs an EIN?
You need an EIN if your business:
- Has employees
- Operates as a partnership or corporation
- Files employment, excise, or specific federal taxes
- Withholds taxes on income paid to a non-resident alien
- Maintains a Keogh plan (a tax-deferred pension)
- Operates as a trust, estate, nonprofit, or qualifying organization
How to Apply for an EIN: Step-by-Step
Step 1: Confirm Eligibility
Your business must be located in the U.S. or its territories, and the applicant must have a valid taxpayer ID number (SSN, ITIN, or EIN).
Step 2: Gather Required Information
Prepare the following:
- Legal name of the business or individual
- Trade name (if different)
- Business address and phone number
- Business entity type (LLC, sole proprietorship, partnership, etc.)
- Reason for applying (e.g., hiring employees, opening a bank account)
- Start date or acquisition date of the business
- Number of expected employees
- Responsible party’s personal details
Step 3: Choose How to Apply
- Online: Use the IRS EIN Assistant for instant processing. Available Monday–Friday, 7 a.m. to 10 p.m. ET.
- Fax: Submit Form SS-4 to the correct IRS fax number.
- Mail: Send Form SS-4 to the IRS address listed for your state.
Step 4: Store Your EIN Securely
Keep your EIN safe. You will need it for tax filings, payroll setup, licenses, permits, and business banking.
Common Uses for an EIN
- Filing federal and state business taxes
- Setting up employee payroll systems
- Opening business bank accounts
- Applying for licenses and permits
- Building business credit and financial credibility
Key Takeaways
- An EIN (Employer Identification Number) is required for most businesses, especially those with employees, corporations, or partnerships.
- It is essential for hiring employees, filing taxes, opening business bank accounts, and applying for permits.
- The EIN application process is free, quick, and can be completed online through the IRS.
- Keeping your EIN secure is important to protect your business identity and ensure smooth financial operations.
Frequently Asked Questions
Do sole proprietors need an EIN?
Not always, but you will need one if you hire employees, form a partnership, or file specific tax forms.
Is there a fee to apply for an EIN?
No, applying for an EIN through the IRS is completely free.
How long does it take to get an EIN?
Online applications are processed immediately. Faxed applications may take up to four business days, while mailed forms can take several weeks.
Can I have more than one EIN?
Each EIN is unique to a specific business entity. If you start a new business or form a new legal structure, you may need a new EIN.
What happens if I lose my EIN?
You can retrieve it by contacting the IRS or checking previously filed tax documents, such as your tax returns or bank records.
