Employer Identification Number (EIN): Who Needs It and How to Find It
An employer identification number (EIN) is like a personal Social Security number for businesses, helping the IRS track their activity. It’s essential for business owners to apply for and monitor. If misplaced, EIN lookup tools can retrieve it.
What is an EIN and how do I get one?
An employer identification number is the nine-digit number the IRS requires from business owners who pay employees. But even if it isn’t required, there are good reasons to still apply for an EIN: You can use an EIN to open a business bank account, apply for business licenses and business loans and file tax returns. It also allows business owners to give out a tax ID number that is different from their Social Security number. The main advantages of using an EIN in this case would be privacy and protection against identity theft.
Apply online to get an EIN immediately
When you apply for an EIN online, you’ll generally receive your number immediately. The IRS’ online EIN application system is available Monday through Friday from 7 a.m. to 10 p.m, EST. Once you receive your EIN, you can use it for your business needs right away, including opening a bank account or applying for a business license.
You can also apply by mail, fax or phone — jump ahead to learn more about the application process or keep reading if you’re not sure if you need an EIN.
Who needs an EIN?
Businesses of all types are welcome to apply for an EIN. However, the IRS requires businesses to get an EIN if you:
- Pay at least one employee.
- Operate a business as a corporation or partnership.
- File the following tax returns: employment; excise; or alcohol, tobacco and firearms.
- Withhold taxes on income, other than wages, paid to a non-resident immigrant.
- Have a tax-deferred Keogh plan for employee pensions.
- Are involved with the following: trusts, with a few exceptions; IRAs; tax-exempt organizations; estates; real estate mortgage investment conduits; nonprofit organizations; farmers’ cooperatives; or plan administrators.
If the IRS considers you to be an employer, you’ll need an EIN.
EIN lookup: How to find your business tax ID
If you previously received an EIN but misplaced your number, the IRS recommends the following steps to find or verify your EIN.
Find your original confirmation letter from the IRS.
As we mentioned earlier, when you apply for an EIN online, the number is immediately available to you. After applying, you get an EIN letter that you can print from your browser, and the IRS also sends you a copy in the mail. If you kept screenshots or paper copies of that letter, your EIN will be on it.
Call any organization where you used your EIN.
Since you would likely need an EIN to open a business bank account or get a business license, the bank or license agency should have your EIN on file. Any other organization that required you to provide your EIN would keep the number on file as well.
Check old tax returns.
Previously filed tax returns for your business will be notated with your EIN. You should keep copies of tax returns and the accompanying records for two to three years, or longer depending on the details of your return.
Contact the IRS.
You can call the Business and Specialty Tax Line at 800-829-4933 Monday through Friday between 7 a.m. and 7 p.m. local time. You’ll need to provide identifying information to help an IRS representative find your number. To receive your EIN over the phone, you must be either a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust or an executor of an estate.
How to apply for an EIN
A business owner, or someone who is given authority to act on behalf of the business, can apply for an EIN online, by mail, phone or fax. Avoid any websites or private businesses promising to provide an EIN for a fee.
Applying online is the simplest way to obtain an EIN — waiting for a number by mail can take weeks, which may not be practical if Tax Day is approaching. The EIN application, Form SS-4, is available to anyone whose business or legal residence is in the U.S. Here are some of the form’s requirements:
- The established name of your business. This could be your own name if you run a sole proprietorship.
- Taxpayer Identification Number, which is your own Social Security number
- Type of entity you operate
- Principal activity of your business, or what your business does
- Reason for needing an EIN
- Length of time you’ve been in business
- Number of employees expected in the next 12 months
Instructions for LLCs
If you operate your business as an LLC, you’ll need to indicate on the form how you are taxed by the IRS. By default, a domestic single-member LLC is considered a “disregarded entity,” while a domestic LLC with two or more members is treated as a partnership. You’ll need to fill out additional paperwork if you want to be classified differently.
Read the SS-4 instructions carefully to make sure you fill out this section correctly or follow the prompts online.
Tips for filling out Form SS-4
Some business owners may not have to fill out all sections of Form SS-4, depending on their reason for applying.
- If you apply online, the application is a series of prompts and must be completed in one sitting; you’ll receive your EIN immediately after submitting the form.
- If you apply by fax, you’ll be faxed your EIN within four business days of submitting Form SS-4.
- If you apply by mail, expect the form to be processed within four weeks.
- International applicants who operate a business in the U.S. can apply by answering questions from the form over the phone.
When a business needs to reapply for an EIN
Businesses may need a new EIN when the business changes hands or changes its structure. Each type of business entity has to apply for a new EIN under the following circumstances:
Sole proprietors, if you:
- Are subject to a bankruptcy proceeding
- Incorporate
- Become a partnership
- Purchase or inherit an existing business that will operate as a sole proprietorship going forward
Sole proprietors do not need a new EIN if they change their business name or location or if they operate multiple businesses under one name.
Corporations, if you:
- Receive a new corporate charter from the secretary of state
- Are a subsidiary of a parent corporation and have been using the parent’s EIN
- Change from a partnership to a sole proprietorship
- Are part of a new corporation that was created after a merger
Businesses that are a division of a corporation do not need a new EIN, nor do existing corporations that survived a merger. Corporations that declare bankruptcy, change names or locations or choose to file taxes as an S corporation also do not need to apply for a new EIN. If a corporate reorganization changes only the name or the place of business, then the corporation does not need a new EIN.
Partnerships, if you:
- Incorporate
- Leave the partnership and it becomes a sole proprietorship
- Terminate an old partnership and start a new one
Partnerships that declare bankruptcy, change names or add or change locations are not required to get a new EIN. If 50% or more of the ownership of the partnership, measured in capital and profits, changes hands within a 12-month period, the business also does not need a new EIN.
Benefits of having an EIN, even if you don’t need it
The U.S. Small Business Administration recommends applying for an EIN immediately after you register your business entity with your state or local government. An employer identification number:
Protects your Social Security number
Setting up an EIN can help protect your Social Security number from overexposure or falling into the wrong hands. For freelancers, using an EIN on your tax forms allows you to avoid sharing your Social Security number with every client who pays you.
If you’re a sole proprietor, you can use an EIN rather than your Social Security number when sending 1099 forms to any contractors or freelancers that you pay.
Makes it easier to open a business bank account
As discussed earlier, many banks require an EIN for business accounts — they want to make sure you have a legitimate business and the right to sign checks as the legal, declared owner of that business. Banks don’t want to set up business accounts for anyone who could expose the institution to dangerous or illegitimate business practices.
A business bank account helps maintain a clear distinction between your business and personal finances. It’s always a good idea to keep your personal and professional expenses separate.
Helps you build business credit
An EIN separates you from your business and can be connected to your business credit score. If you want to help protect your personal credit and establish a business credit profile, having an EIN is an important step.
How to lookup another business’s EIN
You can look up another business’s EIN using the SEC’s Edgar system, as long as the business is a public company. To verify a charitable organization’s EIN, you can check the IRS Tax Exempt Organization Search tool. You may also be able to hire an online company to do the research on your behalf.
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