What is an Employer Identification Number (EIN) and How to Get One?
An Employer Identification Number (EIN) is a unique, nine-digit number issued by the Internal Revenue Service (IRS) to identify a business for tax and legal purposes. It functions like a Social Security number for businesses, allowing them to hire employees, file taxes, open business bank accounts, and apply for business credit.
Even if you’re a sole proprietor, an EIN may be necessary for certain business activities. Understanding when and how to obtain an EIN is crucial for keeping your business compliant with IRS regulations.
Who Needs an EIN?
Not all businesses are required to have an EIN, but you must get one if you:
✔ Hire employees
✔ Operate as an LLC, corporation, or partnership
✔ Need to file business tax returns
✔ Plan to open a business bank account
✔ Apply for business licenses and permits
✔ Want to establish business credit
Even sole proprietors may benefit from getting an EIN to keep personal and business finances separate.
How to Apply for an EIN
Getting an EIN is free and can be done in several ways:
1. Apply Online (Fastest Method)
- Visit the IRS EIN Assistant on the IRS website.
- Fill out the application and submit it online.
- If eligible, you’ll receive your EIN immediately upon completion.
2. Apply by Mail
- Complete Form SS-4 (Application for EIN).
- Mail it to the IRS address listed on the form.
- Processing time typically takes 4-5 weeks.
3. Apply by Fax
- Fill out Form SS-4 and fax it to the IRS.
- If you provide a return fax number, you’ll usually receive your EIN within 4 business days.
4. Apply by Phone (For International Applicants Only)
- International applicants can call the IRS at +1-267-941-1099 (not toll-free) to apply for an EIN.
Final Thoughts
An EIN is essential for businesses that need to hire employees, file taxes, and establish business credibility. Since the IRS offers EIN registration for free, be cautious of third-party services that charge for obtaining one.
Whether you’re a new business owner or expanding your company, getting an EIN is a simple yet crucial step in making your business official and compliant.