Understanding the Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify businesses operating in the United States. Think of it as a Social Security number for your business, used for tax administration and various business activities.
Who Needs an EIN?
You're required to obtain an EIN if:
- You have employees
- Your business operates as a corporation or partnership
- You file employment, excise, or alcohol/tobacco/firearms tax returns
- You withhold taxes on income paid to non-resident aliens
- You have a Keogh plan
- You operate as a non-profit organization
- You represent an estate or trust
- You represent a government agency
Even if not required, obtaining an EIN can help separate personal and business finances and protect your Social Security number from unnecessary exposure.
Required Information
Before starting your application, gather the following:
- Legal name and address of the business
- Trade name (if applicable)
- Responsible party's name and SSN/ITIN
- Type of business entity
- Reason for applying
- Principal business activity
- Starting date of business
- Number of employees expected
- First date wages will be paid (if applicable)
- Physical business location
How to Apply for an EIN
Online Application (Preferred Method)
The fastest and most convenient way is through the IRS EIN Assistant.
Key points about online application:
- Available Monday through Friday, 7 a.m. to 10 p.m. Eastern time
- Completely free
- Provides immediate results
- Must complete in one session
- Limited to one EIN per responsible party per day
Alternative Methods
If you can't apply online, other options include:
- Fax: Submit Form SS-4 to the appropriate IRS fax number. Processing takes about four business days.
- Mail: Send completed Form SS-4 to the IRS address listed on the form. Processing takes 4-6 weeks.
- Phone: International applicants can call 267-941-1099 (Monday through Friday, 6 a.m. to 11 p.m. Eastern Time).
After Obtaining Your EIN
Once you receive your EIN:
- Keep the confirmation letter in a safe place
- Update your business documents with the new number
- Use it to open a business bank account
- Include it on all federal tax filings
- Provide it to vendors, clients, or partners when required
Important: If you lose your EIN, you can retrieve it by:
- Checking previous tax returns
- Contacting banks where you opened accounts
- Calling the IRS Business & Specialty Tax Line at 800-829-4933
Special Considerations
Change in Business Structure
If your business structure changes (e.g., sole proprietorship to corporation), you'll need to apply for a new EIN.
Multiple Businesses
Each separate business entity requires its own EIN. However, if you own multiple businesses under the same structure, you may be able to use one EIN.
Additional Resources
For more detailed information, visit:
Remember that obtaining an EIN is completely free through the IRS. Beware of third-party services charging fees for EIN application assistance.