Employer Identification Number

What Is an Employer Identification Number (EIN)?
An Employer Identification Number (EIN), also called a Federal Tax Identification Number, is a unique nine‑digit number (formatted XX‑XXXXXXX) that the Internal Revenue Service (IRS) assigns to business entities for tax filing and identification purposes. EINs identify businesses the way Social Security numbers identify individuals. They are permanent (they never expire), unique (they are not reissued), and are required for many business activities.

Key facts at a glance
– Format: nine digits, XX‑XXXXXXX.
– Issued by: Internal Revenue Service (IRS).
– Cost: free.
– Validity: permanent; IRS will not reassign an EIN to a different business.
– Time to get: immediate online; about 1 week by fax; 4–6 weeks by mail (see “How long will it take?” below).

Who needs an EIN (common criteria)
You generally need an EIN if your business:
– Has employees.
– Is organized as a corporation or a partnership.
– Files certain federal tax returns (employment, excise, or returns related to alcohol, tobacco and firearms).
– Withholds taxes on income other than wages paid to a nonresident alien.
– Has or is required to have a Keogh plan (qualified retirement plan).
Even if not required, sole proprietors and independent contractors can obtain an EIN and use it in place of their SSN for business reporting.

Benefits of having an EIN
– Opens business bank accounts and applies for business credit.
– Allows you to hire employees and make payroll tax filings.
– Keeps personal SSN off business forms and invoices (helps reduce SSN exposure).
– Required for many state and federal registrations and licenses.
– Enables separate recordkeeping for business and personal finances.

EIN vs. TIN vs. SSN
– TIN (Taxpayer Identification Number) is a general term that covers several identifiers used for tax reporting: SSN (Social Security Number), EIN (Employer Identification Number), ITIN (Individual Taxpayer Identification Number), etc.
– For individuals (employees, sole proprietors who are reporting as individuals), a TIN is usually an SSN.
– For corporations, partnerships, trusts, and estates, the TIN is typically an EIN.

Practical checklist — what to gather before applying
– Legal name of the business (and trade name/DBA if applicable).
– Primary business mailing address and physical address.
– Type of entity (sole proprietor, LLC, corporation, partnership, trust, etc.).
– Reason for applying (started a new business, hired employees, banking purposes, changed entity type, etc.).
– Date business started or acquired.
– Fiscal/tax year closing month.
– Estimated number of employees and date wages will first be paid (if applicable).
– Principal activity and principal product or service.
– Responsible party’s name and taxpayer identification number (SSN, ITIN, or EIN). The IRS requires an individual (not an entity) be named the responsible party.
– Contact telephone number and email.

How to get an EIN — step‑by‑step (practical)

1) Online (fastest — immediate issuance)
– Who can use it: businesses whose principal place of business is in the United States or U.S. territories.
– How: complete the IRS online EIN application (Form SS‑4 workflow) on the IRS website. Once your information is validated, the IRS assigns the EIN immediately.
– Tip: save and print your EIN confirmation notice from the IRS for your records.

2) Fax
– Who can use it: domestic applicants.
– How: complete Form SS‑4 and fax it to the appropriate IRS fax number (see IRS instructions). If you provide a return fax number, the IRS typically returns the EIN within about one week.

3) Mail
– Who can use it: domestic applicants who prefer paper.
– How: mail a completed Form SS‑4 to the IRS address shown in the instructions. Expect about 4–6 weeks for processing.

4) Phone (international applicants)
– Who: entities whose principal business is outside the United States can apply by phone. (If you’re outside the U.S., check the IRS instructions for the correct phone process.)
– Note: the IRS also provides assistance by phone for certain EIN issues.

Form SS‑4: what it is and required fields
– Form SS‑4 (Application for Employer Identification Number) is the form you complete to request an EIN. Required information includes the business name, trade name (if any), mailing and street addresses, type of entity, reason for applying, start or acquisition date, principal activity, accounting period, number of employees expected, and the responsible party’s name and TIN (SSN/ITIN/EIN). Refer to the form’s instructions on the IRS website to complete each line correctly.

After you receive your EIN — practical next steps
– Save the EIN confirmation letter (IRS EIN assignment notice).
– Provide the EIN to banks to open a business bank account.
– Use the EIN on employer payroll filings, business tax returns, and when applying for licenses or permits.
– Keep the responsible party information updated with the IRS if it changes.

What if you lose or misplace your EIN?
– Check your EIN assignment letter from the IRS.
– Look at past tax returns, bank account documents, payroll reports, or other official business paperwork — the EIN is usually listed there.
– Contact your financial institution where you bank — they can usually provide the EIN used for the account.
– If you still cannot find it, call the IRS Business & Specialty Tax Line at 1‑800‑829‑4933. Have identifying information ready before you call.

Closing or deactivating an EIN (if you decide you no longer need it)
– The IRS does not “cancel” or reissue EINs; the number remains associated with the legal entity. However, you can ask the IRS to close the business account and stop future mailings.
– Send a letter to the IRS that includes: legal name of the business, business mailing address, EIN, a copy of the EIN assignment notice (if available), and the reason you want the account closed (for example, business never started, business sold, business closed). Mail this to the address indicated on IRS business account closure instructions. The EIN itself will remain in IRS records even after account closure.

When you need a new EIN (common situations)
You must apply for a new EIN when the ownership or structure of your business changes in certain ways. Examples include:
– A sole proprietorship incorporates or becomes a partnership or corporation.
– An LLC with a single owner becomes a multi‑member LLC, or vice versa — check IRS rules for LLC classification changes.
Always consult the IRS guidance “Do You Need a New EIN?” to determine if your specific change requires a new number.

How long will it take to get an EIN?
– Online: immediate once validated.
– Fax: generally about one week if you provide a return fax number.
– Mail: typically 4–6 weeks.
– Phone (international applicants): varies; follow the IRS instructions for international EIN issuance.

Is an EIN sensitive like an SSN?
– An EIN is not treated exactly the same as an SSN in terms of personal privacy. Many businesses publish their EINs (for example, on Form 990 filings, financial statements, or other public documents). However, you should still protect it as part of your business’s identity and guard against misuse.

Frequently asked practical questions
– Is there a fee? No — the IRS issues EINs free of charge.
– Can one person apply for multiple EINs? An individual responsible party can be the responsible party for multiple EINs (for different entities), but each business entity gets its own EIN.
– Can the IRS revoke an EIN? The IRS generally does not cancel an assigned EIN; it may deactivate a business account, but the EIN remains part of IRS records.

Sample letter to request account closure (use your business letterhead)
[Date]
Internal Revenue Service
[Appropriate IRS address per instructions]

Re: Request to Close Business Account — EIN: XX‑XXXXXXX

To Whom It May Concern,

Please close the IRS business account for the following entity. The business never started operations / the business has closed / other reason: [explain briefly].

Legal business name: [Full legal name]
DBA (if applicable): [DBA name]
Business mailing address: [Address]
EIN: XX‑XXXXXXX
EIN assignment notice enclosed (if available).

Please confirm in writing that the business account has been closed.

Sincerely,
[Name of Responsible Party]
[Title]
[Contact phone and email]

Bottom line
An EIN is a permanent, unique nine‑digit number assigned by the IRS to identify businesses for tax, banking, and regulatory purposes. Most businesses will need one before they begin operations (especially if they hire employees, are structured as corporations/partnerships, or file certain types of tax returns). Applying is free and straightforward: the fastest way is the IRS online application, which issues an EIN immediately.

Sources and further reading
– Investopedia, “Employer Identification Number (EIN)” (Investopedia / Michela Buttignol).
– Internal Revenue Service: “Form SS‑4, Application for Employer Identification Number.”
– Internal Revenue Service: “How to Apply for an EIN.”
– Internal Revenue Service: “Do You Need an EIN?”
– Internal Revenue Service: “Do You Need a New EIN?”
– Internal Revenue Service: “If You No Longer Need Your EIN.”
– Internal Revenue Service: “Taxpayer Identification Numbers (TIN).”

(For specific IRS forms, instructions, and the online EIN application, go to IRS.gov and search for “EIN”, “Form SS‑4”, or the titles above.)

(Continued)

Additional Sections

Common Situations That Require a New EIN
– Change in entity type: If a sole proprietorship incorporates or converts to a corporation, or if a single-member LLC elects to be treated as a corporation, the business generally must apply for a new EIN.
– Partnership formation: When two or more people start a business together as a partnership, that partnership needs its own EIN.
– Multiple legal entities: Each legal entity (corporation, partnership, trust, estate) generally needs its own EIN.
– Change in ownership versus structure: A simple change in ownership (sell of stock in a corporation) often does not require a new EIN, but a change in the underlying entity type usually does.
Example scenarios
– Example 1 — Sole proprietor who hires first employee: Maria has been doing consulting as a sole proprietor using her SSN. She hires a part‑time assistant. Because she now has employees, she must obtain an EIN and begin payroll reporting.
– Example 2 — Single-member LLC elects S corporation status: Javier’s single-member LLC elects to be taxed as an S corporation. That election typically requires applying for a new EIN for the entity taxed as a corporation.
– Example 3 — Estate administration: After a decedent’s death, the estate often needs an EIN to file estate tax documents or to manage estate bank accounts.

Step-by-Step: How to Get an EIN (Practical Guide)
1. Determine whether you need an EIN
– If you have employees, operate as a corporation or partnership, withhold taxes for nonresident aliens, have an excise tax obligation, or file certain retirement plan returns, you will need one. If unsure, check the IRS guidance on “Do You Need an EIN?”
2. Gather the required information
Typical items you should have on hand before filling out the application:
– Legal name and trade name of the business
– Mailing and physical address
– Type of entity (sole proprietor, partnership, corporation, LLC, trust, estate, etc.)
– Reason for applying (started new business, hired employees, banking, changed entity type, etc.)
– Name and taxpayer identification number (SSN, ITIN, or existing EIN) of the responsible party (an individual)
– Date the business started or will start
– Industry or principal business activity and brief description of products/services
– Expected number of employees and first payroll date (if applicable)
– Fiscal year ending month
3. Choose an application method
– Online (recommended for entities with a U.S. mailing address): The IRS online EIN application validates your information and issues an EIN immediately upon successful completion.
– Fax: Submit a completed Form SS-4 by fax. If you provide a return fax number, the IRS generally returns the EIN within about one week.
– Mail: Mail a completed Form SS-4 to the IRS. Expect a longer turnaround (commonly 4–6 weeks).
– Phone (international applicants only): If your principal business is located outside the United States or U.S. territories, you may call the IRS to receive an EIN by phone.
4. Complete Form SS-4 carefully
– Follow IRS instructions for each line. Even small errors can delay processing.
5. Receive and store your EIN confirmation
– Immediately download/print and save the confirmation if you applied online. If by fax or mail, keep the assignment notice in your records.

Practical Checklist for Opening Business Accounts After Receiving an EIN
– Open a business bank account (bank will typically require EIN and formation documents).
– Apply for business licenses or permits (local/state requirements may require EIN).
– Set up payroll and obtain state employer IDs if required.
– Register for state tax accounts (sales tax, unemployment insurance) where applicable.
– Update vendor/customer records to provide your EIN for 1099s or other reporting.

EIN vs. Other Tax Identification Numbers
– Employer Identification Number (EIN): Nine-digit federal identifier used for business entities, estates, trusts, and certain other organizations. Often used on business tax returns and for reporting employer-related taxes.
– Social Security Number (SSN): Individual identifier used primarily for personal tax filing and Social Security benefits.
– Individual Taxpayer Identification Number (ITIN): Issued to individuals who need a U.S. tax ID but aren’t eligible for an SSN (typically certain nonresident or resident aliens).
– “Taxpayer Identification Number” (TIN) is an umbrella term that can mean any of the above, depending on the taxpayer.

What to Do If You Lose or Misplace Your EIN
– Check the original IRS EIN assignment letter (save when first received).
– Look at prior tax returns, bank account documents, payroll reports, or business formation paperwork—your EIN is usually recorded there.
– Contact your bank or payroll provider; they often have the EIN on file.
– If you cannot find the EIN, call the IRS Business & Specialty Tax Line. Be prepared to verify your identity and provide information about the business.

Closing or Deactivating an EIN (If You Never Used It or You Close the Business)
– The EIN is permanently associated with the entity to which it was assigned; the IRS does not “re-issue” numbers.
– If your business never operated and you want the IRS to close the account, send a written request to the IRS’s Cincinnati address (check current IRS guidance for the correct address). Include:
– Legal name of the entity
– EIN
– Business address
– Reason for requesting account closing
– Copy of the EIN assignment notice, if available
– If the business legally closes after operations began, file final tax returns as required and indicate they are final returns; contact state agencies as needed.

Timing Expectations
– Online: Immediate assignment for applicants with a U.S. address and valid information.
– Fax: Often within about one week when a return fax number is provided.
– Mail: Typically 4–6 weeks.
– Phone: Available for international applicants; timing depends on the call.

Common Questions & Answers (Quick FAQs)
– Can a sole proprietor use their SSN instead of an EIN? Yes, but many sole proprietors prefer an EIN to avoid giving out their SSN for business transactions and to separate personal and business records.
– Does my EIN ever expire? No. EINs do not expire and are generally not reassigned.
– Can I apply for an EIN online from outside the U.S.? The online application is restricted to businesses whose principal business, office, or legal residence is in the U.S. or U.S. territories. International applicants usually use the phone method.
– If I change the name of my business, do I need a new EIN? A name change alone does not necessarily require a new EIN. You should report the name change to the IRS according to its instructions for your entity type.

Additional Practical Tips
– Keep your EIN assignment letter in both physical and secure digital locations.
– Limit distribution of your EIN to trusted parties—banks, payroll companies, and vendors that require it—while noting that EINs are not as sensitive as SSNs.
– Use the EIN to open accounts and to receive payments, but do not publicly display it in insecure places (e.g., on social media) to reduce risk of misuse.
– If hiring payroll or accounting professionals, provide the EIN and any state employer numbers so they can properly register and file tax forms.

Resources and Where to Get Help
– IRS webpages and publications on obtaining and using an EIN (Form SS-4 instructions, “Do You Need an EIN?”, application options).
– A qualified tax professional or enrolled agent can advise on whether your business needs an EIN and help with appropriate filings.
– If you have an unusual situation (foreign ownership, complex trust, etc.), consult a CPA or tax attorney for tailored guidance.

Concluding Summary
An Employer Identification Number (EIN) is the federal tax identifier for business entities, used for tax reporting, payroll, opening bank accounts, and many government filings. Most entities that have employees, operate as partnerships or corporations, or meet certain tax-reporting criteria need an EIN. Obtaining an EIN is straightforward: collect the required business and responsible-party information; apply online (if eligible) for immediate issuance, or apply by fax, mail, or phone for other applicants. EINs are permanent and unique to the issuing entity; they do not expire and are generally not reissued. Keep the EIN assignment notice and use your EIN to keep business and personal finances separate. For special cases, ownership changes, or complex structures, consult the IRS guidance or a tax professional to confirm whether a new EIN is required.

Sources
– Internal Revenue Service (IRS): Form SS-4 and instructions; “Do You Need an EIN?”; “How to Apply for an EIN”; “If You No Longer Need Your EIN”; “Taxpayer Identification Numbers (TIN)”; Business & Specialty Tax Line guidance.
– Investopedia overview of Employer Identification Number concepts.

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