Business Tax ID Number (EIN): What It Is and How to Get One

What an EIN is and what it does

An EIN identifies your business with the IRS, like a Social Security number does for a person. It lets you file taxes, hire staff and open accounts without using your SSN.

The IRS uses the EIN to track business tax filings and payments. Banks, payroll providers, state agencies, vendors and funders use it to identify your business.

Using an EIN in place of your Social Security number on forms like a W-9 reduces how often your SSN is shared. That lowers identity theft exposure.

The EIN stays with the business. Once issued, it generally does not change, even if you move, rename the company or add owners, though certain structural changes require a new one. Check IRS instructions for your situation.

Who needs one

Businesses with employees, partnerships, corporations, many LLCs and businesses that file certain tax returns need an EIN. Some sole proprietors can operate without one.

In general, you need an EIN if you:

• Hire employees or run payroll.
• Operate as a corporation or partnership.
• Have a multi-member LLC, or elect to be taxed as a corporation.
• File employment, excise or certain other business tax returns.
• Open a business bank account that requires one.

A sole proprietor with no employees can often use their SSN for tax purposes, but many get an EIN anyway for privacy and to open a business account. Rules change, so confirm with the IRS or your accountant. Read more in business structures.

How to apply, step by step

Apply for free on the IRS website. You answer questions about your entity type and responsible party, and the number is usually issued at the end of the session.

Before you start, gather:

1. Legal name of the business and trade name, if different.
2. Entity type and the state where it was formed.
3. Business address and start date.
4. The responsible party's name and taxpayer ID, normally an owner or principal officer.
5. Reason for applying, such as starting a new business or hiring.

Go directly to the IRS website. The online application has set hours and a time-out, so finish in one sitting. You can also apply by mail or fax using Form SS-4. Our guide to IRS Form SS-4 covers the paper route.

Save the confirmation letter (CP 575 or the online PDF) in a safe place. You will need it for banks and lenders.

Scams and fees: you should not pay to get an EIN

The IRS issues EINs at no charge. Be careful of websites that charge fees or ask for more information than needed.

Many look-alike sites rank high in search results and charge a fee for something you can do yourself for free. Some are legitimate formation services offering extra help, but you should know that the IRS itself does not charge for an EIN.

Protect yourself:

• Type the IRS web address directly or follow a link from the official site.
• Do not enter your SSN into a site you cannot verify.
• Be wary of emails or calls claiming to be the IRS and asking for payment or personal details.

If you use an attorney or accountant, ask what they charge for the service and what you get in return.

What you will use it for

You will use your EIN on tax returns, payroll, bank applications, vendor forms, licenses and funding applications.

Common uses:

• Federal and state tax filings and payments.
• Form W-9 for clients who need to report payments to you.
• Payroll setup and employment tax deposits.
• Opening a business bank account. See business account benefits.
• Applying for business licenses and permits.
• Building business credit and registering with credit bureaus.
• Applying for financing.

Keep the number in a secure place and share it only with parties that have a reason to ask.

Keeping it accurate over time

Update the IRS when your responsible party or mailing address changes, and keep your formation records consistent with what you gave the IRS.

Mismatch between your legal name, address and EIN records causes delays at banks, lenders and payment processors. If the responsible party changes, notify the IRS within the required time. If you close the business, there are steps for closing the account with the IRS and settling final returns. Ask your accountant.

If you lose your number, find it on past tax returns, bank documents or your IRS confirmation letter. You can also contact the IRS to verify it.

Keep records organized. See how long to keep business records.

EINs and business financing

Funders use your EIN to verify the business and check its filings. Having a clean, consistent EIN profile speeds up reviews.

When you apply for financing, you will provide your legal business name, EIN, address and ownership details. These must match your bank statements and formation documents. Mismatches slow things down.

ROI Funder asks for a short application and three months of business bank statements for a complete file. We consider businesses with 500+ FICO, 6+ months in business and $20,000+ in monthly revenue. Sole proprietors with an EIN or SSN can apply; the underwriting looks at the business's revenue and bank activity.

An EIN also helps you build business credit, which can improve future terms. Read how to build business credit and applying for a business credit card with an EIN.