Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique nine-digit number (formatted as XX-XXXXXXX) issued by the Internal Revenue Service (IRS) to identify a business for federal tax and reporting purposes. It functions similarly to a Social Security number for individuals and is often called a Federal Tax Identification Number.

Why an EIN matters

• Required for many business activities: filing certain tax returns, hiring employees, and opening business bank accounts.
• Keeps business and personal finances separate, which helps protect personal privacy and supports corporate liability protections.
• EINs never expire and are never reassigned to a different entity.

Who needs an EIN

You generally need an EIN if your business:
– Has employees.
– Operates as a corporation or partnership.
– Files employment, excise, or alcohol, tobacco, and firearms tax returns.
– Withholds taxes on income (other than wages) paid to nonresident aliens.
– Has a Keogh retirement plan.
– Is a trust, estate, nonprofit, or other entity type that requires reporting.

Sole proprietors without employees can use a Social Security number but may obtain an EIN to protect their SSN.

How to apply

Applying for an EIN is free. Use IRS Form SS-4 and apply by one of these methods:
– Online: Available to applicants with a principal business, office, or agency in the U.S. or U.S. territories. EIN is assigned immediately once validated.
– Fax: Typically about one week for processing.
– Mail: Usually four to six weeks.
– Phone: Available for international applicants who need an EIN for U.S. operations.

The person listed as the business’s responsible party must be an individual (not another entity), except for government entities.

Information required on Form SS-4

• Legal name and trade name of the entity.
• Type of entity (LLC, corporation, partnership, trust, etc.).
• Reason for applying (new business, change of organization, compliance with withholding requirements, etc.).
• Start or acquisition date of the business.
• Principal industry or business activity.
• Name and taxpayer identification number (e.g., SSN or ITIN) of the responsible party.

Timeline

• Online: immediate.
• Fax: ~1 week.
• Mail: ~4–6 weeks.

Benefits of having an EIN

• Hire and pay employees.
• Open business bank accounts, obtain credit, and manage business investments.
• File federal and state business tax returns.
• Help maintain corporate liability protections by separating personal and business finances.
• Avoid using a Social Security number on business documents, reducing exposure to identity theft.

Note: Businesses that change structure (for example, a sole proprietor incorporating) usually must obtain a new EIN.

Closing, deactivating, or canceling an EIN

An EIN is permanently associated with the entity to which it was issued and is not reissued to others. The IRS cannot cancel an EIN, but it can deactivate the IRS business account if a business never operates or closes. To request account deactivation, send a letter to the IRS with the legal name, business address, EIN, EIN assignment notice (if available), and reason for closure.

EIN vs. TIN

“Taxpayer Identification Number” (TIN) is a general term that includes:
– EIN (business entities)
– Social Security Number (SSN)
– Individual Taxpayer Identification Number (ITIN)
– Other specialized IDs (ATIN, PTIN)

Which number serves as the TIN depends on the taxpayer type (e.g., employees usually use an SSN; corporations and partnerships use an EIN).

If you lose or forget your EIN

• Check the IRS EIN assignment notice or any tax returns.
• Your business bank or other financial institutions may have it on file.
• If you cannot locate it, contact the IRS Business & Specialty Tax Line at 1-800-829-4933 and be prepared to verify identifying information.

Quick checklist before applying

• Determine whether your business type requires an EIN.
• Gather the responsible party’s taxpayer identification number.
• Choose the application method (online, fax, mail, phone).
• Have the business’s start date and primary business activity ready.

Conclusion

An EIN is a permanent, unique identifier businesses use for federal tax and reporting purposes. Most entities with employees, corporations, partnerships, or specific filing requirements must obtain one before operating. Applying is free—complete Form SS-4 through the IRS using the method that best fits your situation.