EIN Number
Businesses need an employer identification number (EIN) to file a tax return with the Internal Revenue Service (IRS), and obtaining an EIN is typically one of the first things you should do after registering a new business entity.
What is an EIN number?
Think of an EIN as a Social Security number (SSN) for your business. This type of federal tax ID number is a unique nine-digit number that the IRS assigns to certain new business entities, including tax-exempt organizations. This number also allows businesses to hire employees, open a bank account, and apply for business licenses and permits.
While not all sole proprietorships or limited liability companies need one, you must apply for an EIN if you meet the following criteria:
- Hire or plan to hire employees
- Operate as a corporation or a partnership
- File an Employment, Excise, Alcohol, Tobacco, or Firearms tax return
- Withhold taxes on income paid to a non-U.S. resident
- Have a Keogh plan
Additionally, you should apply for an EIN if you're involved with one of the following organizations:
- Trusts (except for some grantor-owned revocable trusts)
- Individual retirement accounts (IRAs)
- Estates
- Real estate mortgage investment conduits (REMICs)
- Non-profit organizations (even with tax-exempt status)
- Farmers' cooperatives
If you still have questions on whether your business needs an EIN, read this in-depth article on EINs and who needs one.
FAQs
When are EINs used?
Typically, businesses use an employer identification number, or EIN, to file taxes with the IRS, including withholding certain taxes for employees. That said, an EIN is an important tax ID number for your business entity that you'll need to provide when opening a bank account or applying for licenses and permits.
Alternatively, certain trusts, retirement accounts, and organizations also need an EIN to file a tax return with the IRS.
Do you need an EIN number to start a business?
No you don't need an EIN to start a business, in fact, in most cases you will need to register your business before you can apply for an EIN. However, you may need one to run your business.
How do you find an EIN number?
If you can't find your EIN or don't know which of your EINs to use, call the IRS' Business and Specialty Tax line at 800-829-4933 from 7 a.m. to 7 p.m. local time, Monday through Friday.
How long does it take to get an EIN?
That depends on how you apply. By mail, EIN processing delays can take several weeks. However, you can receive your EIN immediately if you apply online either with the IRS directly or through an online service like LegalZoom.