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Employer Identification Number

What is an Employer Identification Number?

The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. When the number is used for identification rather than employment tax reporting, it is usually referred to as a Taxpayer Identification Number (TIN), and when used for the purposes of reporting employment taxes, it is usually referred to as an EIN. These numbers are used for tax administration and must be not used for any other purpose. For example, the EIN should not be used in tax lien auction or sales, lotteries, etc.

An Employer ID Number (EIN) is an identifier used by the IRS for businesses and other entities. Most businesses need an EIN even if they don't have employees. For example, many banks require an EIN before you can apply for a business checking account. Consider the EIN to be like a Social Security number for a business. Although it is primarily used for employment tax identification purposes, an EIN can also be used as a general tax number.

How to Get an EIN

If you begin the process of applying and you don't know answers to some of the sections, you may have to begin over again. It's best to print out a copy of the application, on IRS Form SS-4, and answer all the questions on this form.

You will be filing for the EIN as the​ ​"responsible party" so you will need to be sure you have the authority to make this filing. The IRS has set up the designation of "responsible party" to make sure someone with authority to do business for a company is completing the form. A responsible party should be "the individual or entity that controls, manages, or directs the entity and the disposition of the entity’s funds and assets."

For a small business, a responsible party is a general partner, owner, or principal officer of the company. 

Eligibility

According to the IRS website, in order to be eligible for an employer identification number or EIN:

  1. You may apply for an EIN online if your principal business is located in the United States or U.S. Territories.
  2. The person applying online must have a valid Taxpayer Identification Number (SSN, ITIN, EIN).
  3. You are limited to one EIN per responsible party per day.
  4. The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.

When are they Needed?

According to the IRS, your business requires an EIN under any of the following circumstances: 

  • You have employees
  • Your business is taxed as a C corporation, partnership or limited liability company
  • You file employment taxes, excise taxes, or alcohol, tobacco, or firearm tax returns
  • You withhold taxes on income paid to a non-resident alien
  • Your business has a Keogh plan
  • Your business is involved with trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers' cooperatives or employee plans

Even if your business doesn't fall into any of the above categories, you may still be required to get an EIN if you want to open a business checking account or apply for a loan from a bank or through the Small Business Administration. 

How To Apply

4 Ways to Apply

You can apply for an EIN in one of four ways:

Online:

Many people use the online EIN application form, called the EIN Assistant, between the hours of 7 a.m. and 10 p.m., Eastern time, Monday through Friday.

It's best to have the application completed and all the questions answered before you go online, because you will have to begin over if you have to stop to figure out the responses. The IRS says: 

You must complete this application in one session, as you will not be able to save and return at a later time.

For security purposes, your session will expire after 15 minutes of inactivity, and you will need to start over.

To file online, you must meet some qualifications: You must have a valid U.S. ID number (like a social security number), 

When you have completed the form, the information is validated, and you can receive your EIN immediately. The online method is available for businesses located in the U.S. or its territories. You must have a valid taxpayer identification number before applying online.

Phone: 

Call the Business & Specialty Tax Line at (800) 829-4933. The hours of operation are 7:00 a.m. to 10:00 p.m. local time, Monday through Friday. Someone will take your information over the phone and assign you an EIN at the end of the conversation. Note: International applicants must call (215) 516-6999 (not a toll-free number).

FAX: 

Fax the completed SS-4 application form to your state fax number.

If you include your fax number, you will receive your EIN by fax within four business days.

Mail:

Mail your completed SS-4 Form to the appropriate IRS office. You will receive your EIN by mail within four weeks.

if you are comfortable applying online or by phone, you can receive your EIN immediately instead of waiting for days or weeks.

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