EIN (Employer Identification Number) Guide
What is an EIN?
An Employer Identification Number, or EIN, is a nine-digit federal tax identification number issued by the IRS to identify a business for tax purposes, similar in function to a Social Security number for an individual. Most LLCs, corporations, nonprofits, and partnerships need an EIN, and even single-member LLCs and sole proprietors often obtain one to open a business bank account or hire employees, even when the IRS would otherwise let them use a Social Security number.
What does an EIN cost?
The IRS issues an EIN free of charge directly through its online application. There is no government fee for an EIN, and any charge for 'EIN filing' from a third party is a service fee for completing the application on the applicant's behalf, not a government cost. Applicants who are comfortable completing the short online form themselves can obtain an EIN immediately at no cost.
How to get an EIN
The fastest way to get an EIN is the IRS's free online EIN application, available to businesses with a principal location in the United States or U.S. territories, which issues the number immediately upon completion during the IRS's online hours. Businesses that cannot use the online tool, including most applicants without a U.S. Social Security number or ITIN, can apply by fax or mail using Form SS-4, which takes longer to process. An EIN should generally be obtained after the LLC or corporation is legally formed with the state, since the application asks for the entity's formation information.
When you need an EIN
An EIN is required to hire employees, to open most business bank accounts, to file certain federal tax returns, and for a multi-member LLC, partnership, or corporation regardless of whether it has employees. A single-member LLC with no employees that elects to be taxed as a disregarded entity can sometimes use the owner's Social Security number instead, but most banks and many states' processes now expect an EIN even in that case.
Frequently asked questions
Can I get an EIN before my LLC is officially formed? It is generally best to wait until the state has approved the formation filing, since the EIN application asks for the entity's legal name and formation date as filed with the state. Can I change my EIN later? An EIN is generally permanent for the life of the entity; a new EIN is typically required only after specific structural changes, such as converting from a sole proprietorship to a corporation. Is an EIN the same as a state tax ID? No, an EIN is a federal number from the IRS; many states separately issue their own state tax identification number for state payroll or sales tax purposes.