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So you’ve started a business and keep seeing references to EIN, but aren’t sure what it is. Here’s an overview of what an Employer Identification Number (EIN) is, what it’s used for, and how you can get one of your own.
What is an Employer Identification Number?
An Employer Identification Number (EIN) — also known as a Federal Employer Identification Number, Federal Tax ID number, Federal Identification Number, or even a Federal EIN — is a unique nine-digit number issued to businesses by the IRS for tax ID purposes. An EIN is like a Social Security number for a business.
What type of business needs an Employer Identification Number?
Although EIN is short for Employer Identification Number, it acts as a national identifier for a business. Any business that hires employees needs an EIN, but most businesses, even small business entities without employees, have one. (An online payroll service can help pay employees and even take care of payroll tax filings and payments.) Additionally, corporations and partnerships all need an EIN from the IRS. Learn more about who needs an EIN.
Simply put, any of the following business entities requires an EIN:
- Limited liability corporation (LLC)
- Multi-member LLC
- Single-member LLC
- Non-profit organization
For more details on business entities and EIN requirements, check out this overview from the IRS.
What do you need an EIN for?
The IRS uses EINs to identify businesses for tax purposes. Additionally, businesses use their EIN to open business bank accounts, apply for business licenses, and establish accounts with vendors.
Some types of business that do not need an EIN, such as sole proprietors, choose to get the ID from the IRS anyway. Some independent contractors (a type of sole proprietor) use an Employer Identification Number rather than their Social Security number to safeguard against identity theft. Sole proprietors also sometimes use an EIN to show their status as an independent contractor rather than an employee.
Learn more about how to register your business.
Learn how to formalize and grow your business. Check out the Employer Launchpad.
Who or what is the responsible party?
When applying for an Employer Identification Number, the “responsible party” is the person or entity in charge of the business. On the EIN application, the responsible party enters their name and a taxpayer ID number such as their Social Security number (SSN), Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN).
Learn more about responsible parties.
What is the difference between a federal ID number and a state tax ID number?
Employer Identification Numbers are issued by the IRS on a federal level. (They are also sometimes known as FEIN — Federal Employer Identification Number.) Businesses that sell taxable goods or have employees or property in a state may need a state tax ID number (also called a state identification number).
A business may need one or more state employer identification numbers (also referred to as a state tax ID number). These are generally issued by various state agencies where the business operates. In certain states, a business may have a specific state employer identification number to report income tax, sales tax, withholding tax, and unemployment insurance tax. Some state agencies, depending on how taxes are administered in the state, may allow businesses to report various taxes with just one state employer identification number.
Note that businesses operating in more than one state may need a state employer identification number in each state where they do business.
Also, while a business can have multiple state employer identification numbers, it would generally only have one Employer Identification Number.
Tell me about EIN vs. TIN.
TIN stands for Taxpayer Identification Number and refers to different kinds of ID numbers issued by the IRS. EIN, or Employer Identification Number, is one type of TIN.
How do I apply for an EIN?
The easiest way to get an Employer Identification Number for your business is to apply online free at IRS.gov using the EIN Assistant. If you don’t want to apply for your EIN online, you can download Form SS-4 and send it to the IRS by mail or fax. There are also private companies that help businesses apply for an EIN for a fee.
What is the EIN form?
The Employer Identification Number form on the IRS website must be completed in one sitting because the session expires after 15 minutes of inactivity for security reasons. So make sure you have all the required information about your business before you start. You need to supply information on your business’s legal structure, why you’re applying for an EIN, the responsible party, address, etc.
How do I verify my EIN?
You can verify your EIN by calling the IRS’ Business & Specialty Tax Line, Monday through Friday from 7 a.m. to 7 p.m. local time, at (800) 829-4933. Note that for security reasons, the IRS can only share your business’s EIN with an authorized person such as the sole proprietor, corporate officer, partner in a partnership, or other similar roles.
How do I look up my EIN?
What happens if you lose your Employer Identification Number or forget it? If you previously applied for an EIN for your business but can’t find the number, there are several ways to track it down. If you used your EIN to open a business bank account, reach out to your bank to retrieve your EIN. Similarly, if you filed a past tax return for your business, you can find your EIN by looking up your tax return. If neither of these options work for you, you can call the IRS’ Business & Specialty Tax Line at (800) 829-4933.
Would I ever have to change EINs?
Yes, businesses typically need a new EIN when they’ve had a change of ownership or structural change. The following chart covers when different types of businesses need a new EIN and when they don’t:
Sole proprietorship
| Situation | New EIN needed? |
|---|---|
| Bankruptcy | Yes |
| Business incorporates | Yes |
| Take in partners and function as a partnership | Yes |
| Acquire existing business (through purchase or inheritance) operated as a sole proprietorship | Yes |
| Business changes name | No |
| Move to a new location | No |
| Add a new location | No |
| Operate multiple businesses | No |
Corporation
| Situation | New EIN needed? |
|---|---|
| New charter from secretary of state | Yes |
| Subsidiary of a corporation using the parent company’s EIN | Yes |
| Business became a subsidiary of a corporation | Yes |
| Change to a partnership or became a sole proprietorship | Yes |
| New corporation forms after a statutory merger | Yes |
| Business is a division of a corporation | No |
| Corporation uses existing EIN after a corporate merger | No |
| Bankruptcy | No |
| Change to corporation’s name or location | No |
| Change in tax status to an S corporation | No |
| Reorganization that only changes the identity or place | No |
| State level conversion where business’ structure stays the same | No |
Partnership
| Situation | New EIN needed? |
|---|---|
| Incorporation | Yes |
| Taken over by a partner and operated as a sole proprietorship | Yes |
| Partnership ends and a new one begins | Yes |
| Bankruptcy | No |
| Business changes name | No |
| Move to new location | No |
| Add a new location | No |
| New partnership created from ending a partnership [IRC section 708(b)(1)(B)] | No |
| Half or more of a business’ ownership changes hand in a 12-month period | No |
The IRS has more information about when you need a new EIN.
