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LEGAL DICTIONARY

EIN Number

An Employer Identification Number (EIN), is a nine-digit number used by the Internal Revenue Service (IRS) to identify businesses for tax purposes. Essentially it’s a Social Security Number (SSN) or business ID for your organization.

An EIN number follows the following format: XX-XXXXXXX (for example, 12-3456789). The two-digit prefix refers to which of the 12 different IRS EIN sources issued your federal identification. Prior to 2001, the first two digits indicated the place where your business was located.

In addition to tax reporting, EINs enable businesses to open bank accounts, apply for credit, hire employees, register for employer taxes, and help to keep business and personal finances separate.

EIN numbers are also known as:

  • Federal Employer Identification Number (FEIN)
  • Federal Tax Identification Number (FTIN)

Do I Need to Get an EIN Number for My Business?

The IRS has specific rules in place that decide whether or not you will need to apply for an EIN for your business entity.

If any of the following conditions apply, then you will need to get an EIN:

  • Your business has employees
  • Your business is a corporation, partnership, nonprofit organization, or multi-member LLC
  • Your business files excise taxes or withhold taxes on nonwage income paid to nonresident aliens

On the other hand, sole proprietorship and single-member LLCs without employees that don’t file excise or pension plan tax returns are not required to get an Employer Identification Number (EIN).

Benefits of EIN Numbers for Businesses

Even if your business does not legally require an Employer Identification Number (EIN), there are still several advantages to getting one. Here are some of the reasons why it makes sense to obtain an EIN regardless of the type of business entity you run:

  • The majority of banks will ask for an EIN in order to set up a business banking account for your business.
  • An EIN will help protect your business from identity theft and make your Social Security Number (SSN) more private.
  • You will need an EIN to be able to hire employees legally.
  • If your company is an LLC, an EIN will help your business have its own identity separate from its owners, therefore protecting you from personal liability for the businesses’ debts.
  • You need an EIN to file business taxes and register state taxes.

How to Get an EIN Number?

An EIN number can be requested for free online by visiting the IRS EIN assistant and following a step-by-step application process once your business has been officially created. Your business must already be formed before getting an EIN, as the IRS will require your legal business’s name and formation date.

Any type of business can apply for EINs, including:

What Happens if I Lose My EIN?

If you’ve lost or misplaced your EIN, you can find it on the notice sent by the IRS when your EIN was first issued. It can also be found on your previous tax returns and state licenses/permits, or by contacting the financial institution where you do your day-to-day banking.

If these methods don’t work, then call the IRS' Business & Specialty Tax Line at 1-800-829-4933. Keep your identifying information nearby, as the operator will ask you to provide it on the call.

An Employer Identification Number (EIN), is a nine-digit number used by the Internal Revenue Service (IRS) to identify businesses for tax purposes. Essentially it’s a Social Security Number (SSN) or business ID for your organization.

An EIN number follows the following format: XX-XXXXXXX (for example, 12-3456789). The two-digit prefix refers to which of the 12 different IRS EIN sources issued your federal identification. Prior to 2001, the first two digits indicated the place where your business was located.

In addition to tax reporting, EINs enable businesses to open bank accounts, apply for credit, hire employees, register for employer taxes, and help to keep business and personal finances separate.

EIN numbers are also known as:

  • Federal Employer Identification Number (FEIN)
  • Federal Tax Identification Number (FTIN)

Do I Need to Get an EIN Number for My Business?

The IRS has specific rules in place that decide whether or not you will need to apply for an EIN for your business entity.

If any of the following conditions apply, then you will need to get an EIN:

  • Your business has employees
  • Your business is a corporation, partnership, nonprofit organization, or multi-member LLC
  • Your business files excise taxes or withhold taxes on nonwage income paid to nonresident aliens

On the other hand, sole proprietorship and single-member LLCs without employees that don’t file excise or pension plan tax returns are not required to get an Employer Identification Number (EIN).

Benefits of EIN Numbers for Businesses

Even if your business does not legally require an Employer Identification Number (EIN), there are still several advantages to getting one. Here are some of the reasons why it makes sense to obtain an EIN regardless of the type of business entity you run:

  • The majority of banks will ask for an EIN in order to set up a business banking account for your business.
  • An EIN will help protect your business from identity theft and make your Social Security Number (SSN) more private.
  • You will need an EIN to be able to hire employees legally.
  • If your company is an LLC, an EIN will help your business have its own identity separate from its owners, therefore protecting you from personal liability for the businesses’ debts.
  • You need an EIN to file business taxes and register state taxes.

How to Get an EIN Number?

An EIN number can be requested for free online by visiting the IRS EIN assistant and following a step-by-step application process once your business has been officially created. Your business must already be formed before getting an EIN, as the IRS will require your legal business’s name and formation date.

Any type of business can apply for EINs, including:

What Happens if I Lose My EIN?

If you’ve lost or misplaced your EIN, you can find it on the notice sent by the IRS when your EIN was first issued. It can also be found on your previous tax returns and state licenses/permits, or by contacting the financial institution where you do your day-to-day banking.

If these methods don’t work, then call the IRS' Business & Specialty Tax Line at 1-800-829-4933. Keep your identifying information nearby, as the operator will ask you to provide it on the call.