An Employer Identification Number (EIN) is a unique nine-digit identification number assigned to businesses operating in the United States. The number is issued by the Internal Revenue Service (IRS) and is primarily used for federal tax administration and business identification.
Just as individuals use Social Security numbers for personal identification, businesses use EINs to identify themselves when reporting taxes, filing documents, and conducting financial activities. EINs are sometimes referred to as federal tax identification numbers (TINs). Once issued, an EIN does not expire and is never reassigned to another business.
Who Can Obtain an EIN
A wide range of business entities can apply for and receive an EIN. Eligible organizations include sole proprietorships, partnerships, limited liability companies (LLCs), corporations, nonprofit organizations, government agencies, estates, and trusts.
There are no restrictions based on the number of employees a business has. Even a sole proprietor with no employees may apply for an EIN if the business requires one for tax reporting or banking purposes.
Eligibility Requirements
To obtain an EIN, a business must operate within the United States or its territories. The individual responsible for applying—known as the responsible party—must have a valid taxpayer identification number. This identification may be a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or an existing EIN.
When an EIN Is Required
Businesses commonly need an EIN for several administrative and tax-related purposes. The number is used to file federal tax returns, submit payroll tax reports, and issue tax documents to employees and independent contractors.
An EIN may also be required when opening a business bank account, applying for business licenses, or establishing credit with suppliers and financial institutions.
How to Apply for an EIN
Businesses can apply for an EIN through the Internal Revenue Service. In the past, applicants completed and submitted IRS Form SS-4 by mail or fax. Today, the IRS encourages businesses to complete the process online.
Applicants can submit their request directly through the official IRS website using the online EIN application system. Once the application is approved, the EIN is issued immediately and can be used for tax reporting and other business activities.
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