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- What is an Employer Identification Number (EIN)?
- Who Needs an EIN?
- Who is Eligible to Apply for an EIN?
- How to Apply for an EIN: Available Methods
- Information Needed Before Applying (Form SS-4 Fields)
- Applying Online: Step-by-Step
- After Your EIN is Assigned
- Troubleshooting Common EIN Issues
- When is a New EIN Required?
Navigating federal requirements can sometimes feel complex, but getting an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is a fundamental step for many businesses and organizations operating in the United States. This guide provides a comprehensive overview of the process, designed to make obtaining this crucial number clear and straightforward. Understanding what an EIN is, who needs one, and how to apply can help ensure smooth operations and compliance with federal tax regulations.
What is an Employer Identification Number (EIN)?
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify business entities. Think of it as a Social Security number, but for a business. Its official name is the Federal Tax Identification Number, and its primary purpose is for tax administration, allowing the IRS to track businesses for tax filing and reporting purposes. The number follows a standard format: XX-XXXXXXX.
This number is essential for various business activities beyond just federal taxes. While the IRS issues EINs primarily for federal tax purposes, they are often required for other practical business needs, such as opening a business bank account or applying for state and local licenses. It’s important to note that an EIN is distinct from any tax-exempt number assigned by a state agency for sales and use tax purposes. The IRS provides extensive information about EINs on its website, particularly on the Employer Identification Number page.
Who Needs an EIN?
Determining whether an entity requires an EIN depends on its structure and activities. The IRS provides clear guidelines on this. An EIN is generally necessary if the entity answers “Yes” to any of the following questions:
- Does the entity have employees?
- Does the entity operate as a corporation or a partnership?
- Does the entity file tax returns for Employment, Excise, or Alcohol, Tobacco and Firearms?
- Does the entity withhold taxes on income (other than wages) paid to a non-resident alien?
- Does the entity have a Keogh plan (a type of retirement plan for self-employed individuals and unincorporated businesses)?
Beyond these questions, certain types of organizations are specifically required to have an EIN to operate, even if they don’t meet the criteria above. Every organization, including charities and non-profits, generally must have an EIN, even if it will not have employees.
The following entity types typically need an EIN:
- Corporations: Including S corporations and C corporations.
- Partnerships: General partnerships, limited partnerships, etc.
- Limited Liability Companies (LLCs): Especially multi-member LLCs, or single-member LLCs choosing corporate taxation or having employees/excise tax liability.
- Entities with Employees: Any business hiring employees needs an EIN for payroll tax reporting.
- Tax-Exempt Organizations: Non-profits, charities, churches, political organizations, and farmers’ cooperatives. It is crucial for these organizations to be legally formed before applying for an EIN, as the application starts a three-year countdown for filing required returns to maintain tax-exempt status.
- Estates: Required for handling the financial affairs of a deceased person’s estate.
- Trusts: Including certain retirement plan trusts (like Keogh plans), IRAs required to file Form 990-T, and most trusts except certain grantor-owned revocable trusts not using specific filing methods.
- Plan Administrators: For certain retirement plans.
- Real Estate Mortgage Investment Conduits (REMICs).
- Entities Filing Specific Tax Returns: Those required to file returns for Alcohol, Tobacco, and Firearms taxes, Employment taxes, or Excise taxes.
- Entities Withholding Tax for Non-Resident Aliens: If the entity pays income (other than wages) to a non-resident alien and needs to withhold taxes.
Even if not strictly required for federal tax purposes (for example, a sole proprietor with no employees and no Keogh plan), an entity might still need an EIN for practical reasons like opening a business bank account, applying for business licenses, or fulfilling state tax requirements. Obtaining an EIN is free directly from the IRS.
Who is Eligible to Apply for an EIN?
To apply for an EIN, the applicant entity must designate a “responsible party.” This concept is central to the EIN application process.
The Responsible Party
The responsible party is defined as the individual who ultimately owns or controls the entity or who exercises ultimate effective control over the entity and the management of its funds and assets. This person is the key contact point for the IRS regarding the entity.
- Must Be an Individual: For nearly all entity types, the responsible party must be an individual (a natural person), not another entity. The only exception is for government entities, where an agency or representative who can legally bind the entity can be listed.
- Taxpayer Identification Number (TIN) Required: The application must include the responsible party’s valid Taxpayer Identification Number. This can be either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). An EIN cannot be used as the responsible party’s TIN unless the applicant is a government entity.
- Examples by Entity Type: The responsible party is typically:
- Corporation: Principal officer.
- Partnership: General partner.
- Tax-Exempt Organization: Principal officer.
- Trust: Grantor, owner, or trustor.
- Estate: Executor, administrator, personal representative, or other fiduciary.
- Nominees Cannot Apply: A nominee, someone given limited authority during formation but without control over assets, cannot be listed as the responsible party and cannot apply for the EIN. If a nominee was used for state formation, the actual responsible party must be identified before applying for the EIN. Listing a nominee incorrectly requires correction using Form 8822-B.
General Eligibility Requirements
- Location: To use the convenient online application, the entity’s principal place of business, office, or agency must be located within the United States or U.S. territories. International applicants have different application methods.
- Valid TIN: The responsible party must possess a valid SSN or ITIN to use the online application.
- Entity Formation: For entities like corporations, LLCs, and non-profits, it’s recommended, and sometimes effectively required, that the entity be legally formed under state law before applying for an EIN. Applying prematurely can cause delays or complications, especially for tax-exempt organizations.
- Daily Limitation: The IRS limits EIN issuance to one per responsible party per day. This applies to all application methods (online, fax, mail) to ensure fair treatment for all taxpayers.
How to Apply for an EIN: Available Methods
The IRS offers several ways to apply for an EIN, catering to different needs and timelines. It is crucial to use only one method per entity to avoid accidentally obtaining multiple EINs. Applying for an EIN is always free when done directly through the IRS; beware of third-party websites that charge a fee for this service.
| Method | Description | Processing Time | Form Used | Pros | Cons | Key Requirement |
|---|---|---|---|---|---|---|
| Online | Preferred method for domestic applicants via the IRS website. | Immediate upon validation | Online Tool | Fastest; EIN received instantly; Confirmation letter printable | Session timeout (15 min inactivity); Daily limit (1/day); US/Territory only | Principal business in US/Territory; Responsible party has SSN/ITIN |
| Fax | Submit completed Form SS-4 via fax to the designated IRS number (855-641-6935 for domestic). | ~4 business days | Form SS-4 | Faster than mail; Available 24/7 | Requires fax machine/service; Slower than online | Completed Form SS-4; Include return fax number for faster response |
| Submit completed, signed Form SS-4 via postal mail to the designated IRS address (Cincinnati, OH for domestic). | ~4 weeks (or longer) | Form SS-4 | No internet/fax needed | Slowest method; Potential for delays | Completed and signed Form SS-4 | |
| Telephone | International Applicants Only. Call 267-941-1099 (not toll-free). | Immediate during call | Form SS-4 | Fast for eligible applicants | Only for those without US residence/business; Requires phone call | No legal residence/principal business in US/Territory |
The online method is strongly encouraged by the IRS for domestic applicants due to its speed and efficiency. If applying by fax or mail, Form SS-4, Application for Employer Identification Number, must be completed accurately and sent to the correct address or fax number specified by the IRS, which can be found at Where to File Your Taxes for Form SS-4. For fax applications, including a return fax number allows the IRS to send the EIN back within about 4 business days. Mail applications take significantly longer, typically around 4 weeks, but potentially more, especially during periods of high volume.
Information Needed Before Applying (Form SS-4 Fields)
Whether applying online, by fax, or by mail, the core information required is based on Form SS-4. Having this information ready beforehand streamlines the application process. Key fields include:
| Form SS-4 Line(s) | Information Required | Notes |
|---|---|---|
| 1 | Legal Name of Entity (or Individual): | Must match legal documents (charter, social security card) exactly. |
| 2 | Trade Name (DBA): | Doing Business As name, if different from the legal name. |
| 3 | Executor, Administrator, Trustee, “Care Of” Name: | For trusts, estates, or specific correspondence handling. |
| 4a-4b | Mailing Address: | Where IRS correspondence should be sent. Include full foreign address details if applicable. |
| 5a-5b | Street Address: | Physical location, if different from mailing address. No P.O. Boxes allowed. |
| 6 | County and State of Principal Business Location: | Where the primary business activities occur. |
| 7a-7b | Responsible Party Information: | Full name and SSN or ITIN of the individual in control. |
| 8a-8c | LLC Information (if applicable): | Indicate if it’s an LLC, number of members, and if formed in the US. |
| 9a | Type of Entity: | Check the box that best describes the entity (Sole Proprietor, Corporation, Partnership, Estate, Trust, Non-profit, etc.). |
| 10 | Reason for Applying: | Check only one box (Started new business, Hired employees, Banking purpose, Changed organization type, Purchased business, Created trust/plan, etc.). |
| 11 | Date Business Started or Acquired: | Specific rules apply depending on the reason for applying. For estates, this is the date of death. |
| 12 | Closing Month of Accounting Year: | Usually December, but depends on entity type and choices. |
| 13 | Highest Number of Employees Expected (Next 12 Months): | Categorized as Agricultural, Household, or Other. Enter 0 if none expected. |
| 15 | First Date Wages or Annuities Were Paid: | Enter the date if applicable. |
| 16 | Principal Business Activity: | Check the box that best fits (Construction, Retail, Manufacturing, Health Care, etc.). |
| 17 | Principal Line of Business Description: | Provide more specific detail about the primary business activity. |
| 18 | Previous EIN: | Indicate if the entity has ever received an EIN before. |
| Third-Party Designee (Optional): | Name and contact info of someone authorized to receive the EIN and discuss the application. Requires applicant’s signature to be valid. | |
| Signature: | Must be signed by an authorized individual (owner, officer, partner, fiduciary, etc.). Required for mail/fax applications. |
Gathering these details accurately before starting ensures a smoother application, especially for the time-sensitive online process.
Applying Online: Step-by-Step
The IRS online EIN application tool is the fastest way for eligible entities to get their number. It’s available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. Remember the limitations: principal business in the US/territories, responsible party must be an individual with an SSN/ITIN, and only one EIN per responsible party per day. The session expires after 15 minutes of inactivity, and cannot be saved, so completion in one sitting is necessary.
While the IRS website provides the live tool, the general steps involve:
- Access the Tool: Navigate to the IRS’s “Get an Employer Identification Number” page and click the button to apply online.
- Begin Application: Initiate the process by clicking “Begin Application” or similar prompts.
- Select Entity Type: Choose the legal structure that matches the entity (e.g., LLC, Corporation, Estate, Sole Proprietor). Ensure the entity is legally formed with the state before this step if applicable.
- Provide Required Information: Answer the questions presented, which will mirror the fields on Form SS-4. This includes the entity’s legal and trade names, addresses, the responsible party’s name and SSN/ITIN, reason for applying, start date, closing month, expected employees, and principal business activity. Accuracy is critical, especially for the responsible party’s TIN. The system only accepts standard alpha-numeric characters, hyphens, and ampersands in names; spell out or omit other symbols. Address lines have character limits, so prioritize essential details.
- Review and Submit: Carefully review all entered information for accuracy before final submission.
- Validation and Issuance: The system validates the information during the session. If approved, the EIN is issued immediately online.
- Receive Confirmation: The system provides an option to view, print, and save the EIN Assignment Notice (the confirmation letter) directly from the browser session. It is highly recommended to save and print this confirmation immediately for records.
After Your EIN is Assigned
Once the IRS assigns an EIN, several things happen depending on the application method, and certain next steps are common for new businesses.
Receiving Your EIN Confirmation
- Online: The EIN is displayed immediately upon successful completion of the online application. A confirmation notice (often referred to informally, though the official notice number can vary, e.g., CP 575) can be viewed, saved (as a PDF), and printed directly from the confirmation screen. This online confirmation serves as the official notice.
- Fax: If a return fax number was provided on Form SS-4, the IRS typically faxes the EIN back within about 4 business days.
- Mail: The official EIN confirmation notice (like the CP 575) is sent via postal mail to the address listed on Form SS-4. This usually takes about 4 weeks but can be longer.
- Phone (International): The EIN is provided verbally during the call. The applicant should record it carefully. The IRS representative may request the signed Form SS-4 be mailed or faxed within 24 hours for their records.
The EIN Confirmation Letter (CP 575 / Equivalent)
This official notice is important proof of EIN assignment. It contains the assigned EIN, the official business name and address associated with it, and sometimes lists required federal tax forms.
- Importance: Banks, vendors, or other agencies may require a copy of this letter as proof of the EIN.
- Keep it Safe: The IRS generally issues this notice only once and cannot generate a duplicate copy. It’s crucial to keep this letter in permanent business records.
- Lost Letter? Request a 147C: If the original confirmation letter (like a CP 575) is lost or misplaced, a replacement cannot be issued. However, the business can request an EIN Verification Letter (147C) by calling the IRS Business & Specialty Tax Line (800-829-4933). After verifying the caller’s identity and authorization, the IRS can mail or fax the 147C letter, which serves as alternative proof of the EIN.
Common Next Steps
Obtaining an EIN is often just the beginning. Common subsequent actions include:
- Open a Business Bank Account: Most banks require an EIN (and often the formation documents like Articles of Organization) to open a dedicated business checking account. Keeping business finances separate from personal funds is crucial for liability protection and easier accounting.
- Apply for State and Local Licenses/Permits: Many business activities require licenses or permits from state, county, or city governments. An EIN is often needed for these applications.
- State Tax Registration: Businesses may need to register with their state’s department of revenue or taxation for state-specific taxes, such as income tax, employment taxes (unemployment, workers’ compensation), or sales tax (requiring a seller’s permit or state tax ID). Some states issue a state tax ID number, which may be based on the federal EIN but is distinct.
- Set Up Payroll (if hiring employees): An EIN is mandatory for reporting and paying federal payroll taxes (income tax withholding, Social Security, Medicare) and often state payroll taxes. This may involve enrolling in the Electronic Federal Tax Payment System (EFTPS), which might happen automatically after obtaining an EIN online if employees are indicated.
- File Required Tax Returns: Once an EIN is assigned, the entity is generally required to file applicable federal (and state) tax or information returns, even if no tax is due.
- Report Beneficial Ownership Information (BOI): Many corporations, LLCs, and other entities formed or registered to do business in the U.S. must report information about their beneficial owners (individuals who ultimately own or control the company) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). Check requirements at FinCEN.gov/boi.
Important Timing Note: While an EIN obtained online can be used immediately for tasks like opening bank accounts or filing paper returns, it takes approximately two weeks for the EIN to become part of the IRS’s permanent records and fully integrated into all systems. During this period, attempts to e-file returns, make electronic tax payments (like through EFTPS), or pass TIN Matching programs may fail. If a tax return or deposit is due before the EIN is received or fully processed, write “Applied For” and the application date on the return/payment voucher and follow specific IRS mailing instructions for payments.
Troubleshooting Common EIN Issues
Applicants may occasionally encounter problems during or after the EIN application process. Here are some common issues and how to address them:
Online Application Errors (Reference/Error Codes)
The IRS online application system may return an error message with a reference number if it cannot process the request. Common codes include:
- Reference Number 101 (Name Conflict): Indicates the business name submitted is too similar to an existing entity name in the IRS database (nationwide). Even minor variations might not resolve this.
- Solution: Apply using Form SS-4 by mail or fax (Fax: 855-641-6935 for domestic). The IRS needs to manually review the application and potentially verify formation documents. Trying the online application again with the exact legal name might be attempted first, but Ref 101 usually requires manual processing.
- Reference Number 102 (SSN/ITIN Mismatch): The responsible party’s name doesn’t match the SSN or ITIN provided.
- Solution: Double-check and re-enter the SSN/ITIN and name carefully in the online application. If the error persists, file Form SS-4 by mail or fax.
- Reference Number 103 (Existing EIN Mismatch): Occurs if an existing entity (like a parent company) is incorrectly listed as the responsible party and the EIN/name don’t match IRS records. Remember, the responsible party must usually be an individual.
- Solution: Correct the responsible party information to an individual with their SSN/ITIN. If the error was a typo in an EIN (only applicable if a government entity is applying), correct and retry. Otherwise, file Form SS-4 by mail or fax.
- Reference Number 104 (Third-Party Designee Conflict): The contact information provided for a third-party designee conflicts with other information (e.g., same as the LLC’s).
- Solution: Ensure the designee’s information is distinct and correct. Retry the online application or file Form SS-4.
- Reference Number 105 (Too Many Attempts): The system locks out attempts after multiple errors using the same responsible party TIN.
- Solution: Wait 24 hours for the system to reset before trying the online application again. If errors persist, file Form SS-4 by mail or fax.
- Reference Numbers 109, 110, 112, 113 (Technical Issues): These codes generally indicate temporary system problems or high traffic on the IRS server.
- Solution: Wait a short period or up to 24 hours and try the online application again. If the issue continues, contact the IRS Business & Specialty Tax Line (800-829-4933) or file Form SS-4 by mail or fax.
If the online application fails or returns an error code requiring Form SS-4 submission, remember that faxing (approx. 4 business days) is faster than mailing (approx. 4+ weeks).
General Application Errors/Rejections
If an application (especially e-filed tax returns using the EIN later) is rejected due to errors like typos in names, TINs, or missing forms, correct the errors and resubmit. If an electronically filed return is rejected near the deadline and must be filed on paper, specific procedures apply: mail it promptly (within 10 days of rejection notice or the due date, whichever is later), mark “Rejected Electronic Return – [Date]” on top, include the rejection notice, explain corrections, and ensure it’s signed.
Lost or Misplaced EIN
Forgetting or losing an EIN is common. Follow these steps to retrieve it:
- Check the original EIN confirmation notice (CP 575 or equivalent).
- Contact the bank where the business account is held.
- Check state/local license applications.
- Review prior year business tax returns.
- If still unable to find it, call the IRS Business & Specialty Tax Line at 800-829-4933 (7 a.m. – 7 p.m. local time, Monday-Friday). Be prepared to verify identity as an authorized person (owner, officer, partner, etc.).
When is a New EIN Required?
A new EIN is generally only needed when the fundamental ownership or structure of the business changes. Changing a business name or location does not require a new EIN.
| Scenario | New EIN Needed? | Examples |
|---|---|---|
| Sole Proprietor incorporates or forms a partnership | Yes | Turning your sole proprietorship into an S Corp or LLC taxed as corp/partnership |
| Sole Proprietor purchases/inherits an existing business (to operate as sole prop) | Yes | Buying an existing sole proprietorship |
| Corporation changes to a partnership or sole proprietorship | Yes | Dissolving the corporation and reforming as a different structure |
| Corporation undergoes merger creating a new corporate entity | Yes | Two companies merge, and a brand new corporation results |
| Partnership incorporates | Yes | Existing partnership becomes a corporation |
| Partnership ends and a new one begins | Yes | Old partnership dissolves, new one forms (not just member changes) |
| LLC (new) chooses corporate/S-corp taxation | Yes (for single-member LLC) | A new SMLLC elects to be taxed as a corporation |
| LLC (new multi-member) is formed | Yes | Creating an LLC with more than one owner |
| Business Name Change | No | Renaming the business without changing structure |
| Business Location Change | No | Moving the business address |
| Corporation elects S Corp status | No | Existing C Corp files Form 2553 |
| Corporation survives a merger (uses existing EIN) | No | Company A merges into Company B; Company B continues with its EIN |
| Partnership terminates under specific IRC rules (e.g., Sec 708(b)(1)(B)) but reforms | No | Technical termination/reformation, consult tax advisor |
| LLC (existing) changes tax election (e.g., partnership to corp) | No | Filing Form 8832 for an existing LLC |
Consult the IRS page “When to Apply for a New EIN” or a tax professional if unsure.
Updating Business Information (Address, Name, Responsible Party)
If a new EIN is not needed, but business details change:
- Name Change: Notify the IRS according to entity type. Sole proprietors write to the IRS. Corporations and Partnerships check a box on their annual return (Form 1120 series or 1065) or write a letter if the return was already filed. The notification must be signed by an authorized person (owner, officer, partner).
- Address or Responsible Party Change: File Form 8822-B, Change of Address or Responsible Party – Business. Changes to the responsible party must be reported within 60 days of the change. Processing takes 4-6 weeks.
Other Issues
- Received Unsolicited EIN: If an EIN notice arrives unexpectedly, first confirm no authorized person requested it. If confirmed unauthorized, report it as potential business identity theft to the IRS, possibly using Form 14039-B, Business Identity Theft Affidavit.
- Multiple EINs for One Entity: If a business accidentally obtained more than one EIN, call the IRS Business & Specialty Tax Line (800-829-4933) to determine which number to use.
- Closing a Business: An EIN cannot be truly “canceled.” To close the associated IRS account, file all final tax returns, pay any outstanding taxes, and follow IRS guidance for closing a business. The IRS can then deactivate the EIN account.
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