Understanding EIN: Your Employer Identification Number

What Is an EIN?

An Employer Identification Number (EIN) — also known as a Federal Tax Identification Number — is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business for tax purposes. Think of it as a Social Security number for your business.

An EIN looks like this: XX-XXXXXXX (two digits, a hyphen, then seven digits).

Who Needs an EIN?

The IRS requires an EIN if your business:

• Has employees
• Operates as a partnership or multi-member LLC
• Files certain tax returns (excise, employment, alcohol, tobacco, firearms)
• Withholds taxes on income paid to non-resident aliens
• Has a Keogh plan (a retirement plan for self-employed individuals)
• Is involved with trusts, estates, non-profits, or certain other organizations

Even if not required, single-member LLCs and sole proprietors benefit from having an EIN because:

• It protects your Social Security number from being shared with clients, vendors, and banks
• Most banks require an EIN to open a business bank account
• It adds credibility when working with other businesses
• It's needed if you ever want to hire employees in the future

How to Apply for an EIN

The IRS offers several ways to apply:

Online (Recommended)

The fastest method. Visit the IRS EIN Assistant at irs.gov and complete the application. You'll receive your EIN immediately upon completion. The online application is available Monday through Friday, 7 AM to 10 PM Eastern Time.

By Fax

Complete Form SS-4 and fax it to the IRS. Processing typically takes about four business days.

By Mail

Mail your completed Form SS-4 to the IRS. Processing takes four to six weeks.

By Phone (International Applicants)

If you have no legal residence, principal office, or principal agency in the U.S. or its territories, you can apply by calling the IRS Business & Specialty Tax Line.

Information You'll Need

When applying for an EIN, have the following ready:

• Legal name of the business
• Trade name (DBA) if different
• Mailing address
• County and state where the business is located
• Name and SSN or ITIN of the responsible party (an individual who controls or manages the entity)
• Type of entity (LLC, corporation, partnership, etc.)
• Reason for applying
• Date the business started or was acquired
• Number of employees expected in the next 12 months

EIN vs. SSN vs. ITIN

• SSN (Social Security Number) — Assigned to U.S. citizens and authorized residents for personal tax identification
• ITIN (Individual Taxpayer Identification Number) — Issued to individuals who need a U.S. tax ID but aren't eligible for an SSN
• EIN (Employer Identification Number) — Assigned to business entities for federal tax identification

Using an EIN for business activities keeps your personal SSN or ITIN separate from your business transactions, adding a layer of privacy and security.

Do You Need a New EIN?

You generally need a new EIN if:

• You incorporate or form an LLC
• You take on partners (changing from sole proprietorship to partnership)
• You purchase or inherit an existing business
• You create a trust or estate

You do not need a new EIN if you:

• Change your business name
• Change your business address
• Add a DBA (doing business as) name
• Change from sole proprietorship to single-member LLC (in most cases)

How FormationHub Can Help

While applying for an EIN is free through the IRS, the process can be confusing — especially for first-time business owners or those with unique situations (multiple members, foreign owners, etc.). FormationHub offers EIN filing assistance to ensure your application is completed correctly and processed quickly.