Employer Identification Number (EIN)

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the IRS to businesses operating in the United States. It is used to identify a business entity for tax purposes, such as filing tax returns, opening business bank accounts, hiring employees, and managing payroll. The EIN functions like a Social Security Number but for businesses.

Key Facts

• Nine-Digit Number: Formatted as XX-XXXXXXX, the EIN is assigned by the IRS to uniquely identify a business.
• Required for Most Businesses: Needed by corporations, partnerships, LLCs, nonprofits, and businesses with employees.
• Used for Tax Reporting: Employers use EINs to file employment taxes, income taxes, and other IRS forms.
• Required to Open Bank Accounts: Many banks require an EIN to open a business checking or savings account.
• Needed When Hiring Employees: Employers must have an EIN to report payroll taxes and submit W-2 forms.
• Can Be Applied for Online: Businesses can obtain an EIN for free through the IRS website, often instantly.
• Permanent Number: The EIN generally stays with the business for its lifetime unless the structure changes.

1. What is an EIN?

It’s a unique identification number assigned to a business by the IRS for tax and reporting purposes.

2. Who needs an EIN?

Most businesses, including corporations, partnerships, LLCs, nonprofits, and any business with employees.

3. How do I get an EIN?

You can apply online for free at the IRS website or by submitting Form SS-4.

4. Can I use my Social Security Number instead of an EIN?

For some sole proprietors without employees, yes, but having an EIN is recommended for privacy and business purposes.

5. Does an EIN expire?

No, an EIN is permanent and usually stays with the business throughout its existence.