What Is an EIN Number?

Whether you're forming an LLC, hiring employees, or establishing business credit, understanding when and how to obtain an EIN is crucial for legal compliance and operational success. This comprehensive guide explains everything you need to know about EINs in 2024.

Understanding How an EIN Is Used

An EIN serves as a unique nine-digit identifier assigned exclusively to your business entity by the IRS. This number enables the federal government to track your business's tax obligations, employment records, and financial activities. The format follows the pattern XX-XXXXXXX.

Beyond tax filing, EINs are essential for numerous business operations. Banks require EINs to open business checking and savings accounts, credit card companies need them to issue business credit cards, and suppliers often request EINs before extending credit terms. The EIN also contains embedded information indicating the state where you conduct business operations.

Your EIN establishes and builds your business credit profile, separate from your personal credit history. This separation proves invaluable when seeking business loans, establishing vendor accounts, or pursuing growth opportunities that require financing.

Who Can Obtain an EIN?

The IRS makes EINs available to virtually any business entity operating within the United States, regardless of structure. Sole proprietorships, partnerships, limited liability companies (LLCs), corporations, nonprofit organizations, estates, trusts, and government agencies all qualify for EINs.

Even sole proprietors without employees can obtain EINs, though they're not required to do so. Many sole proprietors choose to get an EIN anyway to separate business and personal finances, protect personal Social Security numbers from excessive distribution, and establish professional credibility with vendors and clients.

Do I Need to Get an EIN for My Business?

Whether your business requires an EIN depends on several factors related to your business structure, operations, and tax obligations. The IRS provides clear criteria for determining EIN necessity.

Your business definitely needs an EIN if any of the following apply:

• Employee status: If your business employs one or more people (including yourself as a W-2 employee of your LLC taxed as a corporation), you must obtain an EIN for payroll tax reporting purposes
• Business structure: Corporations and partnerships automatically require EINs regardless of employee count. Multi-member LLCs default to partnership taxation and therefore need EINs
• Federal tax returns: Businesses filing Employment tax returns (Form 941, 943, 944), Excise tax returns (Form 720), or Alcohol, Tobacco, and Firearms tax returns (Form 5300, 5330) require EINs
• Income withholding: If you withhold taxes on income paid to non-resident aliens beyond wages (dividends, rents, royalties), an EIN is mandatory
• Keogh plan administration: Businesses maintaining Keogh retirement plans must have EINs for plan administration and IRS reporting
• Specific organization types: Trusts (except certain grantor-owned revocable trusts), estates, real estate mortgage investment conduits (REMICs), nonprofit organizations, farmers' cooperatives, and plan administrators all require EINs

Single-member LLCs present a special case. If you operate a single-member LLC with no employees and don't elect corporate tax treatment, you technically don't need an EIN. The LLC is treated as a "disregarded entity" for tax purposes, allowing you to use your personal Social Security number for tax filing.

However, most banks require EINs to open business accounts even for single-member LLCs, and many business owners prefer the privacy and separation an EIN provides. You'll also need an EIN if you later hire employees or add members to your LLC.

Key Benefits of Having an EIN

Obtaining an EIN provides numerous advantages even when not strictly required, making it a smart choice for most business owners.

Personal and Business Separation

An EIN creates clear distinction between your personal and business finances. This separation strengthens your limited liability protection by demonstrating you treat your business as a separate legal entity. It also simplifies accounting, tax preparation, and financial management by keeping business transactions distinct from personal ones.

Banking Requirements

Most financial institutions require EINs to open business checking accounts, savings accounts, and merchant services accounts. While some banks may allow sole proprietors to use Social Security numbers, having an EIN presents a more professional image and facilitates easier banking relationships.

Business Credit Building

Your EIN enables you to establish business credit separate from your personal credit history. Building strong business credit improves access to financing, better credit terms from suppliers, higher credit limits, and the ability to obtain funding without personal guarantees as your business grows.

Privacy Protection

Using an EIN instead of your Social Security number on business documents, vendor applications, and contracts protects your personal information from widespread distribution and reduces identity theft risks. Your Social Security number should remain private, while your EIN can be shared freely with business contacts.

Future-Proofing Your Business

Even if you don't currently need an EIN, obtaining one now prevents delays later when circumstances change. If you decide to hire employees, add business partners, elect corporate taxation, or expand operations, you'll already have your EIN in place and ready to use immediately.

Information Required to Apply for an EIN

Before beginning your EIN application, gather necessary information to ensure a smooth process. According to IRS requirements, all EIN applications must disclose the name and Taxpayer Identification Number (Social Security Number, Individual Taxpayer Identification Number, or existing EIN) of the "responsible party."

The responsible party is the individual or entity that controls, manages, or directs the applicant entity and has authority over disposition of its funds and assets. For most small businesses, this is the owner, managing member, or primary officer. The responsible party must be an individual person (natural person) unless the applicant is a government entity.

Prepare the following information before applying:

• Legal business name: Your LLC's official registered name as it appears on your Articles of Organization
• Trade name (DBA): Any "doing business as" name if you operate under a different name than your legal entity name
• Responsible party information: Full legal name, title/position, and Social Security Number or ITIN of the managing member, owner, or primary officer
• Business structure: Entity type (LLC, corporation, partnership, sole proprietorship, etc.)
• Physical business address: Your principal place of business (not a P.O. box)
• State of formation: The state where you legally formed your business entity
• Reason for applying: Why you need an EIN (started new business, hired employees, changed business structure, etc.)
• Principal business activity: Description of your main business operations
• Products or services offered: What your business sells or provides
• Accounting year closing month: The last month of your fiscal/tax year (typically December for calendar year)
• Contact information: Phone number and email address for IRS communication

How to Apply for an EIN

The IRS provides multiple methods for obtaining an EIN, with online application being the fastest and most convenient option for most businesses. The process is completely free regardless of which application method you choose—never pay any service claiming to expedite EIN applications for a fee.

Online Application (Recommended)

The IRS Online EIN Assistant (available on the IRS website) offers the fastest EIN application method. The online system walks you through a series of questions, validates your responses in real-time, and immediately issues your EIN upon completion.

Key features of online application:

• Instant EIN issuance—receive your number immediately upon successful completion
• Available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time
• Real-time validation prevents errors and omissions
• Immediate confirmation letter available for download and printing
• Limited to one EIN per responsible party per day
• Must be completed in a single session (times out after 15 minutes of inactivity)

The online application requires that the responsible party have a valid Taxpayer Identification Number (SSN, ITIN, or EIN) and that the business's principal place of business is located in the United States or U.S. territories.

Mail Application

If you prefer traditional paper filing or cannot use the online system, complete Form SS-4 (Application for Employer Identification Number) and mail it to the appropriate IRS address based on your state location. Forms are available for download from the IRS website.

Mail processing typically takes 4-6 weeks, so apply well in advance of when you need your EIN. Send your completed form to the address listed in the Form SS-4 instructions for your state.

Fax Application

For faster processing than mail while retaining the paper form option, fax your completed Form SS-4 to the number provided in the form instructions. The IRS typically processes faxed applications within four business days and returns your EIN via fax to the number you provide on the form.

Telephone Application (International Applicants Only)

International applicants whose principal business, office, or legal residence is located outside the United States or U.S. territories may apply by telephone. Call the IRS at the international phone number listed on the IRS website, available Monday through Friday, 6 a.m. to 11 p.m. Eastern Time.

State-Specific EIN Information

While EINs are federal tax identification numbers issued by the IRS, the process and usage remain consistent across all states. However, your state may have additional tax identification requirements separate from your federal EIN.

Many states require businesses to register for state tax identification numbers for sales tax collection, withholding taxes, or unemployment insurance. These state tax IDs are separate from your federal EIN, though some states may use your EIN as part of their state identification system.

Check with your state's Department of Revenue, Taxation, or Employment to determine what additional state tax registrations your business needs beyond your federal EIN.

When Do You Need a New EIN?

Certain significant business changes require you to obtain a new EIN while others allow you to keep using your existing number. Understanding when you need a new EIN helps ensure tax compliance and proper IRS reporting.

Situations requiring a new EIN:

• Converting from single-member LLC to multi-member LLC (or vice versa)
• Changing entity type (LLC to corporation, sole proprietorship to LLC, partnership to corporation, etc.)
• Electing corporate taxation for your LLC (filing Form 8832 or Form 2553)
• Incorporating a sole proprietorship or partnership
• Purchasing or inheriting an existing business and operating it as a different entity type
• Bankruptcy—corporate entities in bankruptcy typically need new EINs

Situations where you keep your existing EIN:

• Changing your business name (DBA or legal name amendment)
• Changing your business address or relocating to another state
• Adding or removing members from an LLC (while maintaining the same tax classification)
• Corporate reorganizations that don't change the underlying corporate structure
• Death of a responsible party (estate continues using the decedent's EIN)

How to Find or Verify Your EIN

If you've lost or misplaced your EIN, several methods can help you retrieve it without applying for a new number.

Check these sources to locate your existing EIN:

• EIN confirmation letter: The IRS sends a confirmation letter (CP 575) immediately after approving your EIN application. This letter clearly displays your EIN and should be filed with important business documents
• Previous tax returns: Your EIN appears on all business tax returns, including Forms 1120, 1120-S, 1065, and 940/941
• Business bank statements: Your EIN typically appears on statements for business bank accounts
• Business loan or credit documents: Loan applications, credit card applications, and related documents usually display your EIN
• Previous correspondence from IRS: Any letters or notices from the IRS regarding your business will include your EIN
• State business registrations: Some states display EINs on business registration confirmations or annual reports
• Form 1099 or W-2: If your business receives 1099 forms or issues W-2s to employees, your EIN appears on these forms

If you cannot locate your EIN through these sources, call the IRS Business & Specialty Tax Line at 800-829-4933, available Monday through Friday, 7 a.m. to 7 p.m. local time. Have your business information ready to verify your identity. The IRS can provide your EIN over the phone once they confirm you're authorized to receive it.

Frequently Asked Questions