An EIN, or Employer Identification Number, is essentially a Social Security number for your business. Officially known as an Employer Identification Number, it’s a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in the United States. Think of it as your business’s federal tax ID, used to identify your business entity to the IRS.
You can obtain an EIN completely free of charge directly from the IRS in just a few minutes by applying online.
Who Actually Needs an EIN? Do I Need One?
Not every business requires an EIN, but many do. You’ll definitely need an EIN if your business falls into any of these categories:
- You have employees: If you hire employees, you’ll need an EIN to handle payroll taxes and report employment taxes to the IRS.
- You operate as a corporation or partnership: Most corporations, S corporations, and partnerships require an EIN, even if they don’t have employees.
- You file certain types of business tax returns: If your business needs to pay excise taxes or taxes on alcohol, tobacco, and firearms, you’ll need an EIN.
- You withhold taxes on income for non-resident aliens: If you pay income (other than wages) to a non-resident alien and are required to withhold taxes, an EIN is necessary.
- You operate certain types of entities: This includes trusts, estates, real estate mortgage investment conduits, non-profit organizations, and farmer’s cooperatives.
Even if you aren’t legally required to have an EIN for federal tax purposes, you might still want to get one. For instance, banks often require an EIN to open a business bank account, and some states may require it for state tax purposes or business licenses. It’s important to note that EINs are specifically for business tax and related purposes, not for activities like state tax lien auctions, sales, or lotteries.
For more detailed information, you can refer to IRS Publication 1635, Understanding Your EIN (PDF).
Before You Start Your EIN Application: Key Preparations
Before you jump into the EIN application process, there are a couple of crucial steps to take, especially if you are forming a formal business entity:
1. Form Your Legal Entity First (If Applicable):
If you’re establishing a legal entity for your business, such as a Limited Liability Company (LLC), partnership, or corporation, it’s essential to officially form this entity with your state before applying for an EIN. This also applies to tax-exempt organizations. This formal registration with your state creates the legal foundation for your business structure, which is then recognized by the IRS when you obtain your EIN.
2. Special Note for Tax-Exempt Organizations:
Non-profit or tax-exempt organizations should also ensure they are legally formed before applying for an EIN. It’s important to be aware that most tax-exempt organizations are at risk of automatic revocation of their tax-exempt status if they fail to file required returns or notices for three consecutive years. For more details on filing requirements, see the IRS information on Annual Filing and Forms for Charities and Nonprofits.
3. Political Organizations and EINs:
Political organizations have a very specific requirement. They must file Form 8871, Political Organization Notice of Section 527 Status within 24 hours of their creation to be considered tax-exempt. Crucially, you need an EIN to file Form 8871. Therefore, political organizations need to obtain an EIN almost immediately upon formation.
Easy Ways to Apply for an EIN: Online, Fax, and Mail
Getting an EIN is a straightforward process. If your business’s primary location is within the United States, you have several convenient options to apply:
1. Apply Online: The Fastest Method
The quickest and most recommended way to get an EIN is through the IRS’s online EIN application system. You can access it directly here: Apply for an EIN Online. The online application is interactive and will guide you through each step. Upon successful completion, you’ll receive your EIN immediately.
2. Apply by Fax:
If you prefer to apply by fax, you can download Form SS-4, Application for Employer Identification Number. Fill out the form completely and accurately, and then fax it to the IRS at 855-641-6935. If you choose this method, you can expect to receive your EIN within approximately four business days.
3. Apply by Mail:
You can also apply for an EIN by mail. Download and complete Form SS-4, and mail it to the following address:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Applying by mail is the slowest method. It typically takes around four weeks to receive your EIN from the date you mail your application.
Applying for an EIN from Outside the U.S. (International Applicants)
If your business’s principal place of business is located outside of the United States, the application methods are slightly different:
1. Apply by Phone:
International applicants can apply for an EIN by phone by calling the IRS at 267-941-1099. This phone line is open Monday through Friday, from 6:00 a.m. to 11:00 p.m. Eastern Time.
2. Apply by Fax or Mail (Using Form SS-4):
You can also use Form SS-4. For fax applications from outside the U.S., the fax number is 304-707-9471. For mail applications, send Form SS-4 to:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Important Limitation: Regardless of the application method (online, phone, fax, or mail), you are limited to applying for only one EIN per day.
Understanding the “Responsible Party” in Your EIN Application
When you apply for an EIN, you are required to designate a “responsible party.” This is a crucial role. The responsible party is defined as the individual or entity that has ultimate control over the business and its assets, and who is responsible for directing the management and policies of the entity.
Typically, for most small businesses, the responsible party is an individual – often the business owner or a key executive. However, for larger organizations or certain entity structures, the responsible party could also be another entity (e.g., a parent company for a subsidiary).
The EIN application will require information about the responsible party, including:
- Name: The legal name of the individual or entity.
- Taxpayer Identification Number: This is usually the Social Security Number (SSN) for an individual. If the responsible party is an entity, its Employer Identification Number (EIN) or Individual Taxpayer Identification Number (ITIN) would be provided.
- Signature: The responsible party (or an authorized person if the responsible party is an entity) must sign the application.
Important Warning about Nominees: The IRS explicitly states that nominees are not authorized to apply for an EIN. A nominee is someone who is applying on behalf of the actual responsible party but is not themselves in control of the entity. Using a nominee to apply for an EIN can put the entity’s information and privacy at significant risk and is against IRS regulations.
When Can You Start Using Your EIN? Immediate Use vs. Processing Times
Once you receive your EIN, you can use it almost immediately for many essential business operations. Here’s a breakdown of when you can use it and when there might be a slight delay:
Immediate Use of Your EIN: You can generally use your EIN right away for tasks such as:
- Opening a Business Bank Account: Banks require an EIN to open accounts for businesses other than sole proprietorships using their SSN.
- Applying for Business Licenses and Permits: Many federal, state, and local agencies require an EIN for business licensing and permits.
- Filing Tax Returns by Mail: You’ll need to include your EIN on any tax returns you file by mail.
Wait Period for Certain IRS Systems (Up to 2 Weeks): There are a few IRS systems that may take a little time to update with your newly issued EIN. You may need to wait up to two weeks before you can:
- Pass the IRS Taxpayer Identification Number (TIN) Matching Program: This program verifies that the TIN (in this case, your EIN) you provide matches IRS records. This might be relevant when setting up new vendor accounts or for certain financial transactions.
- E-file Tax Returns: While you can use your EIN immediately for paper filing, you might need to wait a short period before you can successfully e-file your business tax returns.
- Make Tax Deposits and Pay Electronically: To make federal tax deposits or payments electronically through systems like EFTPS (Electronic Federal Tax Payment System), there can be a processing period. Refer to IRS Publication 15, Circular E, Employer’s Tax Guide and IRS Publication 4275, EFTPS Express Enrollment for New Businesses (PDF) for specific guidance related to your EIN issue date.
What to Do If You Are Still Waiting for Your EIN
It’s possible that you might have a tax filing deadline approaching but haven’t yet received your EIN. Here’s how to handle this situation:
If Your Tax Return is Due: If your tax return due date arrives before you receive your EIN, you should still file your return on time. In the space on the tax form where the EIN is requested, write “Applied For” and include the date you submitted your EIN application.
If a Tax Deposit is Due: Similarly, if you have a tax deposit due and haven’t received your EIN yet, don’t delay your payment. Send your payment to the appropriate IRS service center address for your state. You can find these addresses on the IRS website in the “Where to File Tax Returns – Addresses Listed by Return Type” page. Make your check or money order payable to the Internal Revenue Service. On your payment, clearly write your business name (exactly as it appears on your Form SS-4 application), your business address, the type of tax you are paying, the tax period the payment covers, and the date you applied for your EIN.
When is a New EIN Required? Understanding EIN Changes
Generally, you will need to obtain a new EIN if there are significant changes to your business’s ownership or legal structure.
Situations that typically require a new EIN include:
- Change in Business Structure: If you change your business structure – for example, from a sole proprietorship to a corporation, or from a partnership to an LLC (in some cases, depending on state and specific circumstances).
- Change of Ownership (in some cases): Depending on the type of entity and the extent of ownership change, a new EIN might be necessary. For example, a change in partnership structure might require a new EIN.
- Becoming a Subsidiary or Division of a Corporation: If your business becomes a subsidiary or division of a larger corporation.
When You Do NOT Need a New EIN: It’s important to know that you generally do not need to get a new EIN simply for changes like:
- Changing Your Business Name: A name change alone does not require a new EIN.
- Changing Your Business Address: Moving your business location doesn’t necessitate a new EIN.
- Changing the Responsible Party: Changes in who is designated as the responsible party for the business do not require a new EIN.
For detailed guidance on specific scenarios, refer to the IRS information page on “When Do You Need a New EIN?”.
What Happens When You No Longer Need Your EIN? Deactivation vs. Cancellation
If you cease operating your business or determine that you no longer need your EIN, it’s important to understand the IRS process. The IRS does not “cancel” EINs, but they can “deactivate” them.
Deactivating an EIN essentially flags it in the IRS system as no longer active. It prevents the EIN from being used by another entity in the future. To request deactivation of your EIN, you’ll typically need to notify the IRS in writing, indicating that you are no longer operating the business associated with that EIN.
For specific instructions on how to deactivate your EIN, consult the IRS page “If You No Longer Need Your EIN”.
Lost or Forgotten EIN? How to Recover It
It’s not uncommon to misplace or forget your EIN. Here are several ways you can try to find your missing EIN:
- Check Your EIN Application Notice (Form CP 575): When you successfully applied for your EIN, the IRS typically sends a confirmation notice, Form CP 575. This notice will clearly display your EIN. Try to locate this original notice in your business records.
- Contact Your Bank: If you opened a business bank account using your EIN, your bank will have your EIN on file. Contact your bank and inquire if they can provide it to you.
- Check State and Local Business Licenses: If you’ve applied for state or local business licenses or permits, these agencies often record your EIN. Check your records or contact the relevant agencies.
- Review Past Business Tax Returns: Your EIN will be printed on all previously filed business tax returns. Look through your copies of past tax returns (federal, state, and local) to find it.
If You Still Cannot Locate Your EIN: If none of these methods work, you can call the IRS Business and Specialty Tax Line at 800-829-4933. The IRS will verify your identity and business information. If you are authorized to receive the information, they can provide your EIN to you over the phone. This phone line is available Monday to Friday, 7:00 a.m. to 7:00 p.m. Eastern Time. For TTY/TDD users, the number is 800-829-4059.
Multiple EINs or Entities: Best Practices
Generally, a business entity should only have one EIN. Having multiple EINs for the same business can lead to confusion and potential issues with the IRS.
If You Have Multiple EINs: If you believe your business may have unintentionally obtained more than one EIN, or if you are unsure which EIN to use, contact the IRS Business and Specialty Tax Line at 800-829-4933 (TTY 800-829-4059). The IRS can help you determine which EIN is the correct one to use and resolve any discrepancies.
Taking Over Another Business: If you acquire or take over an existing business from a previous owner, it is crucial to use your own EIN for reporting and depositing employment taxes from the date of acquisition forward. Do not use the previous owner’s EIN. Refer to IRS Publication 15, Circular E, Employer’s Tax Guide for detailed guidance on employer responsibilities when taking over a business.
Received an EIN You Didn’t Request? Potential Scams and Errors
Occasionally, businesses or individuals may receive an EIN from the IRS even though they did not apply for one. This could be due to an error, or it could potentially be a sign of identity theft or a scam.
If You Receive an Unrequested EIN: If you receive an EIN notice for a business you did not create or apply for, it’s important to take action to protect yourself and your information. The IRS provides guidance on what to do if you “received an EIN you didn’t request”. You should also be vigilant about potential tax scams and fraud. If you suspect someone may have stolen your EIN or is using it fraudulently, report it to the IRS immediately through their procedures for reporting tax scams and fraud, outlined here: “Report a tax scam or fraud”.
Retirement Trust EIN Issues: Reactivating Deactivated EINs
If you have a retirement trust and find that its EIN has become deactivated, the IRS has a process to re-establish it.
To reactivate a retirement trust EIN, you need to send specific information to the IRS, including:
- The EIN in question.
- The name of the trust.
- The address and contact information for the sponsor or trustee of the trust.
You can send this information to the IRS in one of the following ways:
-
Fax: 855-214-7520
-
Mail:
Internal Revenue Service
Attn. EP Entity, M/S 6273
Ogden, UT 84201 -
Delivery Service:
Internal Revenue Service
1973 N Rulon White Blvd.
Attn. EP Entity, M/S 6273
Ogden, UT 84404
Beneficial Ownership Information Reporting to FinCEN: A New Requirement
It’s crucial for businesses to be aware of a new federal requirement related to beneficial ownership information reporting. The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) now requires certain types of companies to report information about their beneficial owners – the individuals who ultimately own or control the company.
Who Needs to Report? This reporting requirement applies to many corporations, Limited Liability Companies (LLCs), and other similar entities that are created in or registered to do business in the United States.
Reporting Deadline: The beneficial ownership information reporting to FinCEN began on January 1, 2024. The initial reporting deadline for your company depends on when your company was created or registered.
Where to Find More Information: For detailed information about the beneficial ownership information reporting rule, including whether your company is required to report, who qualifies as a beneficial owner, and reporting deadlines, please visit the FinCEN website.
Important Note: The IRS cannot answer questions related to FinCEN’s beneficial ownership information reporting requirements. For any questions about this new rule, you need to contact FinCEN directly.
Understanding what an EIN is, who needs one, and how to get and manage it is a fundamental step in setting up and running a business in the United States. This guide has provided a comprehensive overview to help you navigate the EIN process effectively.
