As a business owner, when another person performs work for you, and is is classified as an employee you must have an Employer Identification Number (EIN).
What is an EIN?
An EIN is a unique nine-digit number that identifies your business for tax purposes. It’s like a Social Security number but is meant for business related items only.
An EIN can be used to open a business bank account, file your tax returns, and, in some instances, apply for business licenses. It’s helpful to apply for one as soon as you start planning your business. This will ensure there are no delays in getting the appropriate licenses or financing that you may need to operate.
It also ensures you can pay and file your tax responsibilities include withholding, depositing, reporting, and paying employment taxes.
Who Needs an EIN?
An EIN is needed by any business that retains employees. However, non-employers are also required to obtain one if they operate as a corporation or partnership. Sole proprietors are not required to obtain an EIN.
Not sure whether you need an EIN? Review this guide from the IRS. If you answer yes to any of the questions in the list, you need to apply for an EIN.
As your business grows, be sure to visit the IRS website and its resources for a complete list of who needs an EIN.
How to Apply for an EIN
The simplest way to apply for your EIN is online via the IRS EIN Assistant. As soon as your application is complete and validated, you’ll be issued an EIN. There is no charge for this service.
You can also apply by fax or mail. If your business is incorporated outside of the United States, you cannot apply for an EIN but you can call 267-941-1099, 6:00 a.m. to 11:00 p.m. (ET) Monday through Friday. Read more about How to Apply for an EIN and How Long Will it Take to Get an EIN?
Related Resources
- Applying for a New EIN – If the ownership or structure of your business has changed you may need a new EIN.
- Locating a Lost EIN – If you have misplaced your EIN, these resources can help you locate the number.
- Canceling an EIN – Find out how to close the IRS business account affiliated with your EIN. This may be necessary if your new business never started up.