Learn what an EIN is, who needs one, how to apply free through the IRS, when a new number may be required, and what it does not establish.
An Employer Identification Number, or EIN, is a unique nine-digit federal tax identification number assigned by the IRS to businesses, tax-exempt organizations, estates, trusts, employee plans, and certain other taxpayers. It identifies federal tax accounts and commonly appears on returns, payroll filings, information returns, and business banking records.
A business generally needs an EIN if it has employees, operates as a corporation or partnership, or files certain employment, excise, alcohol, tobacco, firearms, or other federal returns. Trusts, estates, nonprofit organizations, retirement plans, and other entities may also need one.
A sole proprietor without employees may sometimes use the owner's Social Security number for federal income-tax reporting. An EIN can nevertheless be useful when opening a business account, giving a payer Form W-9, or keeping the owner's SSN off routine business documents. Bank, licensing, payroll, and vendor requirements may be stricter than the minimum federal tax rule.
A single-member LLC may need an EIN for employees or excise taxes even when it is disregarded for federal income-tax purposes. The name and taxpayer identification number used on Form W-9 can depend on the LLC's tax classification, so the form's current instructions matter.
The IRS issues EINs free. Eligible applicants can use the official IRS online application; Form SS-4 is available for fax, mail, and specified international applications. The person completing the application should understand the entity's legal name, mailing address, formation date, tax classification, principal activity, expected employees, and reason for applying.
The "responsible party" is generally the person who ultimately owns or controls the entity or exercises effective control. Nominees generally should not be listed as the responsible party. Changes to the responsible party or address may require Form 8822-B.
Apply after the entity has been legally formed when state formation is required. Applying too early, guessing at the tax classification, or submitting duplicate applications can create IRS account problems.
Assume a California single-member LLC is formed with the California Secretary of State. Forming the LLC creates the state-law entity. Applying to the IRS creates its EIN account. Neither step, by itself, elects S corporation treatment.
If the LLC later wants S corporation tax status, it must satisfy the eligibility rules and make a valid election, generally on Form 2553. If it hires employees, it must also establish payroll accounts and register with California EDD. One number or filing does not replace the others.
An EIN commonly appears on:
Protect an EIN even though it appears on business documents. Fraudulent returns and accounts can be opened using stolen business identity information.
An SSN identifies an individual for Social Security and tax purposes. An ITIN is an IRS tax-processing number for certain individuals who are not eligible for an SSN. An EIN identifies business and other non-individual tax accounts, although sole proprietors can have EINs.
California may assign separate account numbers. An employer registers with EDD for payroll-tax accounts. A seller may need a seller's permit from CDTFA. An LLC or corporation also has a California Secretary of State entity number. These are not substitutes for an EIN.
A change in ownership or entity structure can require a new EIN. Examples can include incorporating a sole proprietorship or ending one partnership and creating another. A business generally does not obtain a new EIN merely because it changes its name or address, but the rules depend on entity type and the specific transaction.
Before applying again, review the IRS "Do you need a new EIN?" guidance. Keeping the old and new accounts straight is especially important for payroll, information returns, and prior-year filings.
Heath Income Tax can help a business identify the tax classification and filing accounts it needs, prepare returns using the correct EIN, and coordinate federal, California, bookkeeping, and payroll records.
Is an EIN the same as a federal tax ID?
Usually, yes. "Federal tax ID" commonly refers to an EIN in a business context.
Does an EIN expire?
No. The IRS generally does not reuse or cancel an EIN, although accounts can be closed when no longer needed.
Do I need an EIN before forming an LLC?
Form the state-law entity first, then apply using its correct legal name and formation information.
Can I use an EIN instead of my SSN on every form?
No. The correct number depends on the taxpayer, entity classification, and form instructions.
The definitions and examples on this page are for informational purposes only and do not constitute tax advice. Tax laws change frequently and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.
Click a question or ask us your own.
Ask Us a Question
Message Sent!
Thank you — we'll get back to you as soon as possible.