What is a Federal Employer Identification Number (EIN), Who Needs One, and how to Get One

An EIN is like a social security number for your business, and is used to file taxes, but also for opening bank accounts, credit cards, and starting accounts with third party vendors, like credit card processors. It’s a good idea for any business to get an EIN, though not all businesses are required to have one. An EIN is free from the IRS.

Here, you’ll learn what an EIN is, who should have one, and how to get one.

When a Business is Required to have an EIN

Most businesses can benefit from an EIN, but you’re business is federally required to have an EIN if any of the following apply:

You have employees.
You operate as a Partnership or Corporation.
You withhold taxes on income, other than wages, paid to a non-resident alien.
You have a Keogh plan.
You are involved with any of the following organizations: Plan administrators, Farmers’ coops, non-profit organizations, real estate mortgage, investment conduits, estates, trusts.

When a Business is not Required to have an EIN

If you’re business is structured as an LLC or a sole proprietorship, and none of the above apply, then you aren’t specifically required by the IRS to get an EIN, but that doesn’t mean you shouldn’t.

An EIN will still be required by most banks, credit lenders, and third party vendors. Using an EIN will also help reduce the possibility of losing your company’s limited liability status in the event of a lawsuit.

How to Get an EIN If You are Using a Social Security Number

For businesses located within the US, an EIN is simple to apply for online. Apply for your EIN through the IRS’ online application.

To apply for an EIN, you’ll need a valid social security number and signature of a responsible party.

How to Get an EIN Without a Social Security Number

It is very possible to get an EIN without using a social security number, but you won’t be able to use the online application process, and you’ll have to wait about 4 weeks to get your EIN (as opposed to instantly when applying online).

To apply for an EIN by mail without using a social security number, complete IRS form SS-4.

Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Unless you have no legal residence, principal place of business, or principal office in the US, in which case you’ll mail it here:

Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999

How Long Does it Take to get an EIN?

You’ll receive your EIN immediately upon completing the application online. If applying by mail, expect to wait about 4 weeks.

An important note: You cannot use an EIN obtained online to apply for an EIN online. In this instance, you’ll need to apply by mail.

When You’ll Need a new EIN

Any time you restructure or rename your business, you’ll likely need a new EIN.

What are the Benefits of having an EIN

Using an EIN to file taxes helps bolster the separation between your personal assets and your business.
Even if you’re not required federally to have an EIN, you’ll likely need one to open a bank account.

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