What Is an EIN?

An EIN allows the IRS to easily identify your business for tax purposes, serving a similar function as a social security number for individuals. When you’re forming your business, obtaining this number should be a top priority. Fortunately, it is both easy and free to secure an EIN for your business. 

What Is an Employer Identification Number (EIN)?

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number provided to businesses by the Internal Revenue Service (IRS). The primary function of an EIN is to allow the IRS to identify and track businesses for tax reporting purposes, similar to an individual’s social security number (SSN). 

An EIN is free for businesses to obtain from the IRS and is issued in the state the business is formed. 

Do You Need an EIN?

Limited liability companies (LLCs), partnerships, and corporations generally require an EIN. However, all business structures can apply for and obtain an EIN including nonprofits and sole proprietors. 

Businesses may require an EIN for a number of reasons: 

  • To file certain tax returns 
  • To open a business bank account 
  • To apply for business lines of credit 
  • To hire and pay employees 
  • To maintain your corporate veil 

How to Apply for an EIN

Fortunately, obtaining an EIN is free through the IRS and the process is fairly straightforward. You can apply for an EIN by phone, fax, online, or by mail using Form SS-4

We recommend you have this information prepared: 

  • The type of business entity you’re applying on behalf of 
  • The reason for your application (forming a new business, for example)
  • The start date of your business
  • The industry your business is in 

If your company is located outside the US but you are obtaining an EIN in order to do business within the country, you will need to apply over the phone at (267)-941-1099. 

Additional Tips:

  • If you apply for your EIN online, you will receive your employer ID number immediately. If you choose to apply via fax, however, your EIN may take up to two weeks and if done by mail, up to five weeks. 
  • Once you’ve formed your business, your next step should be obtaining your EIN in order to open a business bank account and separate your personal and business assets. 
  • When you obtain your EIN from the IRS, document it somewhere secure to ensure you don’t lose it as the process of obtaining a lost or misplaced EIN can be tedious. 
  • If you obtain an EIN and determine you no longer need it, you can mail a physical letter to the IRS with your business name, address, EIN, and reason for account closure to suspend the IRS account. 

Conclusion

Applying for an EIN is an important step in forming a business. Whether you’re registering an LLC, corporation, or other business type, an EIN protects your company, allowing you to report taxes and conduct important activities such as opening a business bank account. 

FAQs

Is an EIN the same as an SSN?

No, an EIN is not the same as an SSN or social security number. However, the two function similarly. An EIN is used by the IRS to track business’s tax reporting while a social security number is used by the IRS to track individual’s tax reporting. 

What are the benefits of getting an EIN?

There are several benefits of getting an EIN. For example, an EIN allows businesses to protect personal assets, file taxes, hire and pay employees, and open business bank accounts. 

How do I look up my EIN?

To look up an EIN, your first step is to track down the notice provided by the IRS after you applied for your employer ID. 


If this is unsuccessful, you can try to locate your EIN through bank accounts opened using the number, previously filed tax returns, or call the IRS directly using the Business & Specialty Tax Line at (800)-829-4933.