Disclaimer: The following information is provided for educational purposes only and in no way constitutes legal, tax, or financial advice.
An Employer Identification Number (EIN) is a nine-digit number the Internal Revenue Service (IRS) assigns to businesses for tax and reporting purposes. It’s also sometimes called a business ‘tax id number.’
EINs are used for a variety of reasons. Some of these include:
If you operate an online business, you would need to provide the EIN (assuming you have a U.S. business) to the likes of Amazon FBA, Kindle Publishing, Youtube, Google Adsense, Shopify, Stripe, Paypal, and many more.
The simple, short answer to this question:
All businesses need an EIN unless you’re a sole proprietor without employees. However, even a sole proprietor may obtain an EIN to avoid using their Social Security Number (SSN) for business reasons.
The longer IRS answer:
According to the IRS, you need to get an EIN if any of the following apply:
You can check the detailed rules on whether you need to get an EIN on the IRS website’s EIN page.
When running a business, you will often have to provide a tax id number to suppliers and vendors. If you don’t have an EIN, you might have to share your Social Security Number (SSN). Given all the data breaches happening lately, the fewer people know your SSN, the better to prevent identity theft.
Most banks will require an EIN before you can open a business account or get a business credit card. You’ll want to open a new bank account for your business, or earned income. Using your personal account is going to create complications further down the line, particularly if your revenue and expenses grow significantly.
Some business licenses and permits may require an EIN. Be sure to search online to see if these requirements are relevant to your business.
Zero Dollars. Applying for an EIN is free. Therefore, beware of sites that offer to apply for EIN on your behalf and charge you a fee. If you see any services like this, don’t fall for the trap. The EIN application is free and relatively easy, as explained below.
You can apply for an EIN online, via fax, by mail, or by phone.
You can apply online for an EIN directly on the IRS website. Check if you qualify to apply online — your principal business must be located in the U.S. or U.S. Territories and the person applying online must have a valid Taxpayer Identification number (be that SSN or ITIN). You are also limited to one EIN per responsible party per day, which shouldn’t be a problem for most.
If you qualify to apply online, this is the fastest and best method. Once you complete the online application, you receive your EIN immediately after submitting your application.
Note that the online application is also subject to the hours of operation, which you can check on the website (currently Monday to Friday, 7 am to 10 pm Eastern Standard Time).
Send in Application SS-4 to the fax number listed in the instructions. Generally, you will receive your EIN within four business days. You will have to provide your fax number so the IRS can fax the EIN back to you.
Send in Application SS-4 to the address listed in the instructions. Generally, you will receive your EIN in the mail within 4-5 weeks.
You can call the number listed in the instructions. Currently, that number is 267-941-1099 (not a toll-free number) and the hours of operation are 6 am to 11 pm Eastern time, Monday through Friday.
You should complete Application SS-4 ahead of the call as it will help you be prepared and answer all the questions you’re asked on the phone. Once they assign you an EIN, you can write the tax id number in the upper right corner of the form, sign and date the form. You may also be asked by the IRS representative to sent this signed form via mail or fax to the address they provide.
There is a lot of misinformation online regarding this topic. The general rule is that you don’t need an SSN or ITIN to get an EIN. You only need the SSN or ITIN if you want to apply for an EIN online. If you don’t have an SSN or ITIN, you can apply for the EIN by mail or via fax. You can also apply by phone if your company is formed or incorporated outside the U.S.
Tip: If you don’t have an SSN or ITIN, in box 7b, you can enter ‘Foreign’ instead of your SSN/ITIN.
To find your EIN:
Check anywhere your EIN could have been written down
Contact the IRS
If all else fails, you can call the IRS by calling the Business & Specialty Tax Line (currently 800-829-4933) during the hours of operation (currently 7 am – 7 pm local time in the U.S. Monday through Friday). Make sure an authorized person (e.g., the partner, managing LLC partner, sole proprietor, corporate officer) calls as IRS will only release the information to an authorized person.
Sometimes, with certain business changes, you may need a new EIN. First, you should determine whether you need a new EIN in your specific situation.
You can (and should) check IRS Publication 1635 for detailed rules on when you need a new EIN as well as other helpful information about EINs. Additionally, consult your lawyer or accountant, when you make changes to the business.
Here are some examples of when you might need a new EIN summarized.
For Sole Proprietorships, you will need an EIN if any of the following happens:
For Corporations, you will need an EIN if any of the following happens:
For Partnerships, you will need an EIN if any of the following happens:
If you changed the business name or address, you generally don’t need a new EIN. You can inform the IRS via certain filings of the change.
If you only changed your address, you can use Form 8822-B, Change of Address or Responsible Party – Business to notify IRS of the new address. You don’t need a new EIN.
If you only changed the responsible party, similarly, you can use Form 8822-B, Change of Address or Responsible Party – Business to notify IRS of the new address. You don’t need a new EIN.
If you change your business name after applying for and receiving an EIN, you can send a letter (signed by an authorized person) requesting the change of business name to the IRS at the same address where you filed your tax return. Partnerships and corporations must include a copy of the Articles of Amendment that were filed with the state that authorized the name change.
An EIN is unique and is not reused or reassigned to any other entity even if you decide later you don’t need it anymore. While technically the IRS cannot ‘cancel’ the EIN, it can close your business account with the IRS. So, if you decide you don’t need the number anymore (such as if you dissolve your business), you can close your account with the IRS.
You’ll need to send a letter to the IRS and include:
You’ll also have to pay any taxes (e.g., income, payroll, employment taxes) that your business is liable for before you can close the account and ‘cancel’ the EIN.
You’ll need to send a letter to the IRS and include:
Disclaimer: The following information is provided for educational purposes only and in no way constitutes legal,…
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