Are you ready to embark on a crucial journey for your business? Getting an Employer Identification Number (EIN) from the IRS is a fundamental step for many businesses in the U.S. and even for some foreign entities. Think of it as your business's Social Security Number – a unique identifier that the IRS uses to track your tax obligations. Whether you're starting a new venture, hiring employees, or changing your business structure, an EIN is likely a necessity.
This comprehensive guide will walk you through every single step of the EIN application process, ensuring you're well-equipped to get your business its vital tax ID.
Understanding the EIN: Why You Need It
Before we dive into the "how-to," let's quickly grasp the "why." An EIN, or Employer Identification Number, is a nine-digit number assigned by the IRS to business entities for tax purposes. While the name suggests it's only for employers, many businesses need one even if they don't have employees.
You will likely need an EIN if your business:
- Has employees (you'll need it for payroll tax filings).
- Is structured as a corporation or partnership.
- Files excise taxes.
- Withholds taxes on income, other than wages, paid to a non-resident alien.
- Is a trust (except certain grantor trusts), estate, real estate mortgage investment conduit, non-profit organization, farmers' cooperative, or plan administrator.
- Operates as a multi-member LLC.
- Wants to open a business bank account.
- Needs to apply for business licenses or permits.
Important Note: If you're a sole proprietor or a single-member LLC without employees, you generally don't need an EIN for federal tax purposes. You can use your Social Security Number (SSN). However, many choose to get an EIN for privacy reasons and to help separate business and personal finances.
Step 1: Determine Your Eligibility and Gather Essential Information
This is where your journey truly begins. Before you even think about filling out a form, you need to confirm your eligibility and collect all the necessary details. This upfront preparation will save you significant time and prevent potential errors down the line.
Sub-heading: Who is the "Responsible Party"?
The IRS requires you to identify a "responsible party" for the EIN application. This is the individual who controls, manages, or directs the applicant entity and the disposition of its funds and assets.
- For a sole proprietorship, it's typically the sole proprietor.
- For a partnership, it's a general partner.
- For a corporation, it's a principal officer.
- For an LLC, it's a member or manager.
The responsible party must have a valid Taxpayer Identification Number (TIN), which can be a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or an existing Employer Identification Number (EIN) if the responsible party is another entity.
Sub-heading: Information You'll Need to Gather
Have the following details readily available:
- Legal Name of Your Business: This should be the official name under which your business is registered (if applicable) or will operate.
- Trade Name or "Doing Business As" (DBA) Name (if any): If your business operates under a name different from its legal name, have that handy.
- Mailing Address and Physical Address of Your Business: These can be the same or different.
- Type of Entity: (e.g., Sole Proprietorship, Partnership, Corporation, LLC, Non-Profit Organization).
- Reason for Applying: (e.g., Started New Business, Hired Employees, Changed Business Type, Purchased Active Business).
- Date Business Started or Acquired: The month, day, and year your business began operations or was acquired.
- Closing Month of Accounting Year: This is usually December for most businesses, but it could be different depending on your fiscal year.
- Maximum Number of Employees Expected in the Next 12 Months: Provide estimates for non-agricultural, agricultural, and household employees.
- Principal Business Activity: A brief description of what your business does (e.g., "Retail Sales," "Consulting Services," "Manufacturing").
- Name and TIN (SSN, ITIN, or EIN) of the Responsible Party.
- If applying online, ensure your principal business is located in the U.S. or U.S. territories. If not, you'll need to apply by fax, mail, or phone.
Step 2: Choose Your Application Method
The IRS offers several ways to apply for an EIN. The best method for you will depend on your specific circumstances and how quickly you need the EIN.
Sub-heading: Online Application (Recommended for Most U.S. Businesses)
- Speed: Immediate EIN issuance. This is by far the fastest method.
- Availability: Monday to Friday, 7:00 a.m. to 10:00 p.m. Eastern Time.
- Eligibility: Your principal business, office or agency, or legal residence (in the case of an individual) must be located in the United States or U.S. territories. The applicant (responsible party) must also have a valid SSN or ITIN.
- Process: You'll fill out an online form that mirrors the questions on Form SS-4. You must complete the application in one session, as the system will not save your progress and times out after 15 minutes of inactivity.
Sub-heading: Fax Application
- Speed: You can typically receive your EIN within four business days if you provide a return fax number.
- Availability: 24 hours a day, 7 days a week.
- Eligibility: Available to both U.S. and international applicants.
- Process: You'll complete Form SS-4 (Application for Employer Identification Number) by hand or by typing into the PDF, then fax it to the appropriate IRS fax number.
Sub-heading: Mail Application
- Speed: This is the slowest method, taking approximately four to six weeks for processing.
- Eligibility: Available to both U.S. and international applicants.
- Process: You'll complete Form SS-4 and mail it to the IRS.
Sub-heading: Telephone Application (Only for International Applicants)
- Speed: You can often receive your EIN during the call.
- Availability: Monday to Friday, 6:00 a.m. to 11:00 p.m. Eastern Time.
- Eligibility: Only for applicants who have no legal residence, principal place of business, or principal office or agency in any state or U.S. territory. The person calling must be authorized to receive the EIN and must be able to answer questions from Form SS-4.
- Process: Call the IRS at 267-941-1099 (not a toll-free number).
Step 3: Complete Form SS-4 (Application for Employer Identification Number)
Regardless of your chosen application method (except for the online application where the form is integrated), you'll need to complete Form SS-4, Application for Employer Identification Number. Even if you apply online, the online questions directly correspond to this form. It's a good idea to review and even fill out a draft of Form SS-4 before starting the online application to ensure you have all the information readily available.
Sub-heading: Key Sections of Form SS-4
Here's a breakdown of the important sections you'll encounter on Form SS-4:
- Part I: Applicant Information
- 1. Legal name of applicant: Your official business name.
- 2. Trade name or DBA name: If applicable.
- 3. Executor, Administrator, Trustee, "Care of Name": Only if someone else is receiving mail for the entity.
- 4a. Mailing address and 4b. City, state, and ZIP code: Where you want IRS mail to go.
- 5a. Street address and 5b. City, state, and ZIP code: Physical location of the business (can be same as mailing).
- 6. County and state: County and state of principal business location.
- 7a. Name of responsible party and 7b. SSN, ITIN, or EIN: The individual who manages or directs the entity.
- Part II: Other Information
- 8a. Type of entity: Check the box that best describes your business (e.g., Sole Proprietor, Partnership, Corporation, LLC).
- 8b. If a corporation, enter state and date of incorporation: Specific to corporations.
- 9a. Reason for applying: Select the primary reason (e.g., Started new business).
- 9b. If "Other," specify: Provide details if your reason isn't listed.
- 10. Date business started or acquired: Important for tax purposes.
- 11. Closing month of accounting year: Usually December.
- 12. Highest number of employees expected in the next 12 months: Estimate carefully.
- 13. Do you expect to have a tax liability within the next 12 months?: Generally "Yes" for most businesses.
- 14. Do you expect to pay wages subject to federal employment taxes within the next 6 months?: If you plan to hire employees.
- 15. Principal activity of the business: Provide a brief, clear description.
- 16. Check one box that best describes the principal line of business: Select from broad categories.
- 17. If you want to apply for a tax-exempt organization, enter the applicable Internal Revenue Code (IRC) section: For non-profits.
- 18. If you want to apply for a group exemption, enter the name of the central organization: Specific to certain non-profits.
Sub-heading: Third-Party Designee (Optional but Useful)
If you want to authorize another person (like your accountant or lawyer) to receive your EIN and answer questions about the application, you can complete the "Third-Party Designee" section on Form SS-4. This is particularly helpful if you're not a U.S. resident and are applying by phone or fax.
Step 4: Submit Your Application
Once you have all your information meticulously gathered and, if applicable, your Form SS-4 filled out, it's time to submit!
Sub-heading: Online Submission (The Fastest)
- Go to the IRS Website: Navigate to the "Apply for an Employer Identification Number (EIN) Online" section on the IRS.gov website.
- Click "Apply Online Now": Follow the prompts.
- Complete the Interview-Style Application: This online application will guide you through questions similar to Form SS-4. Remember, you cannot save and return later.
- Receive Your EIN Immediately: Upon successful completion, your EIN will be displayed. Print or save this confirmation page immediately as you won't be able to access it again later from the website.
Sub-heading: Fax Submission
- Complete Form SS-4: Ensure all fields are accurately filled.
- Locate the Correct Fax Number: The fax number depends on your business's location.
- For U.S. businesses: Fax to 855-641-6935.
- For international applicants (no legal residence/business in U.S.): Fax to 304-707-9471.
- Always double-check the latest instructions on the IRS website for the most current fax numbers.
- Include a Return Fax Number: If you want your EIN faxed back to you, make sure to clearly provide your fax number on Form SS-4.
Sub-heading: Mail Submission
- Complete Form SS-4: Fill out the form meticulously.
- Mail to the Appropriate IRS Address:
- For U.S. businesses: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
- For international applicants (no legal residence/business in U.S.): Internal Revenue Service, Attn: EIN International Operation, Cincinnati, OH 45999.
- Again, verify the addresses on the IRS website or Form SS-4 instructions for the most up-to-date information.
Sub-heading: Telephone Submission (For International Applicants Only)
- Gather All SS-4 Information: Have all the details from Form SS-4 ready.
- Call the IRS: Dial 267-941-1099.
- Be Prepared to Answer Questions: An IRS assistor will ask you questions to verify your identity and business information.
- Receive EIN During the Call: If successful, the assistor will provide your EIN verbally. Write it down immediately!
Step 5: What to Do After Receiving Your EIN
Congratulations! You've successfully obtained your Employer Identification Number. But your journey isn't quite over. Here's what to do next:
Sub-heading: Keep Records Safe
- Print or Save Confirmation: For online applications, ensure you have a physical or digital copy of the EIN confirmation letter.
- Keep Form SS-4: If you applied by fax or mail, keep a copy of your completed Form SS-4 for your records.
- Store Securely: Treat your EIN like your SSN. Keep it in a secure place.
Sub-heading: Use Your EIN
You can generally use your EIN immediately for most business needs, such as:
- Opening a Business Bank Account: Most banks will require an EIN.
- Applying for Business Licenses and Permits: Many state and local agencies will ask for your EIN.
- Hiring Employees: You'll need it for payroll and employment tax filings.
- Filing Federal Tax Returns: Use it to identify your business on all IRS forms.
- Establishing Business Credit: Your EIN will be used to build your business credit profile.
Sub-heading: Be Aware of Processing Times for Certain Actions
While you receive your EIN immediately online, or quickly by fax/phone, it might take a couple of weeks for the IRS systems to fully update. This means:
- Electronic Filing of Tax Returns: You might need to wait up to two weeks after receiving your EIN to file an electronic return that requires it.
- Electronic Deposits/Payments: Similar waiting period for electronic tax payments.
- IRS TIN Matching Programs: If you're using a third-party service that verifies TINs with the IRS, there might be a slight delay.
Common Pitfalls and How to Avoid Them
- Applying for multiple EINs unnecessarily: You usually only need one EIN per entity. A new EIN is typically only required if your business structure or ownership fundamentally changes (e.g., a sole proprietorship incorporates). Changing your business name, address, or responsible party does NOT require a new EIN.
- Incorrect or incomplete information: Double-check everything on your application. Mismatched names, addresses, or TINs can lead to significant delays and complications.
- Not having the responsible party's SSN/ITIN for online application: If the responsible party doesn't have an SSN or ITIN, you cannot apply online. You'll need to use fax, mail, or phone (for international applicants).
- Missing the EIN confirmation: For online applications, print or save the confirmation immediately. The IRS does not email or mail a physical confirmation for online applications.
10 Related FAQ Questions
Here are some frequently asked questions about EINs, with quick answers:
How to Check if I Already Have an EIN?
You can usually find your EIN on previous tax returns, IRS notices, or business bank account statements. If not, you can call the IRS Business & Specialty Tax Line at 1-800-829-4933 (7:00 a.m. to 7:00 p.m. local time, Monday through Friday).
How to Get a New EIN if My Business Structure Changes?
You will generally need a new EIN if your business legally changes its structure (e.g., from a sole proprietorship to a corporation or partnership). Refer to IRS guidelines on when a new EIN is required for your specific situation.
How to Change My Business Address or Responsible Party for My EIN?
You do not need a new EIN for these changes. You can notify the IRS of an address change by filing Form 8822 (for individuals) or Form 8822-B (for businesses), or by updating your address when you file your next tax return. To change the responsible party, use Form 8822-B.
How to Get an EIN for a Non-Profit Organization?
Non-profit organizations apply for an EIN using the same Form SS-4 and the same methods (online, fax, mail, phone for international) as other businesses. You will need to indicate your specific non-profit entity type on the form.
How to Get an EIN for an International Business (Without a U.S. Presence)?
If you don't have a legal residence, principal place of business, or principal office in the U.S. or its territories, you cannot apply online. Your options are by fax (855-215-1627 within U.S. or 304-707-9471 outside U.S.), mail (Internal Revenue Service, Attn: EIN International Operation, Cincinnati, OH 45999), or by telephone (267-941-1099).
How to Correct an Error on My EIN Application?
If you made a mistake on your SS-4 application, you should contact the IRS Business & Specialty Tax Line at 1-800-829-4933 to inquire about correcting the information. Do not apply for a new EIN.
How to Open a Business Bank Account Without an EIN?
Generally, banks require an EIN for business accounts. As a sole proprietor without employees, you might be able to use your SSN for a business account, but an EIN is usually preferred by banks and provides a layer of separation.
How to Use a Third-Party Designee for My EIN Application?
On Form SS-4, there is a section (Part V) where you can designate a third party (like an accountant) to receive your EIN and discuss the application with the IRS on your behalf. This is especially useful if you are not available during IRS operating hours.
How to Avoid Scams When Applying for an EIN?
The IRS provides EINs for free. Be wary of websites or services that charge a fee to "get" you an EIN, as you can do it yourself directly through the IRS at no cost. Only use the official IRS website (IRS.gov) for online applications.
How to Know if I Need a New EIN for My LLC?
If your LLC is a single-member LLC taxed as a disregarded entity (meaning it reports on your personal tax return), you generally don't need an EIN unless you hire employees or elect to be taxed as a corporation. If your LLC has multiple members, it is usually taxed as a partnership and requires an EIN. If your single-member LLC elects to be taxed as an S-Corp or C-Corp, you will need a new EIN.
