Almost every business needs a federal identifier before it can do anything useful: open an account, take on staff, or file anything at all.
It is quick to obtain and easy to get wrong in ways that are slow to unpick, because the details you supply attach to the entity permanently. The commonest error is applying before the entity actually exists, so the name on the identifier never quite matches the name on the formation documents.
This covers who needs one, the ways to apply and how they differ in speed, what information you have to have ready, and what to do when something on the record turns out to be wrong.
An Employer Identification Number (EIN) is the business equivalent of a Social Security Number, a nine-digit identifier the IRS uses to track tax obligations for entities other than individuals. If you are starting a business, opening a business bank account, hiring employees, or forming a trust or estate, you almost certainly need an EIN. IRS Form SS-4 is the application that gets you one.
Who Needs an EIN
The IRS requires an EIN if any of the following apply:
- You have or expect to have employees (including household employees if filing Schedule H)
- Your business operates as a corporation, S-corporation, partnership, or LLC with more than one member
- You file excise, employment, alcohol, tobacco, or firearms tax returns
- You are a trust (other than a grantor trust), an estate, a real estate mortgage investment conduit (REMIC), a non-profit organization, a farmers' cooperative, or a plan administrator
- You withhold taxes on income (other than wages) paid to a nonresident alien
- You are involved with a Keogh plan
- You are a bank or financial institution that needs an EIN for a client
Founders apply for this the moment they decide on a name, then discover the details they supplied no longer match the entity they actually formed. Get the formation done, then apply with the exact legal name and the real responsible party. An identifier attached to the wrong facts is slow to correct and follows the business everywhere.
Ankit Sarawagi, CPA, CA, MBA · LinkedInThree Methods to Apply
1. Online (Fastest, Immediate EIN)
The IRS Online EIN Assistant at IRS.gov is available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. You complete the interview-style session in about 15 minutes and receive your EIN immediately at the end. You can download and print the confirmation (CP 575) right away.
- Limitation: only one EIN may be issued per responsible party per day
- Available only to entities whose principal business, office, or agency is located in the US or its territories
- International applicants must apply by phone (+1-267-941-1099)
Pro Tip: Save your CP 575 confirmation. The IRS will only issue one, if you lose it, you must call or write to retrieve your EIN; there is no online lookup tool for third parties.
2. Fax (4 Business Days)
Complete Form SS-4 and fax it to the IRS fax number for your state. Include a return fax number on the form. If your information is complete and accurate, the IRS will fax your EIN back within four business days.
3. Mail (4 Weeks)
Mail the completed Form SS-4 to the appropriate IRS address based on your state of principal business. This method takes approximately four weeks and is the slowest option. Use it only if fax and online options are not available.
Information Required on Form SS-4
| Line / Field | What to Enter |
|---|---|
| Line 1, Legal name | Exact legal name of the entity (matches state formation documents) |
| Line 2, Trade name (DBA) | Doing-business-as name, if different from legal name |
| Line 4a, Mailing address | Street, city, state, ZIP where IRS correspondence goes |
| Line 7a, Responsible party | Individual (not an entity) who owns or controls the entity; must have SSN or ITIN |
| Line 8a, Entity type | Sole proprietor, Partnership, Corporation, S-corp, LLC, etc. |
| Line 9a, Reason for applying | Started new business, hired employees, banking purpose, created a trust, etc. |
| Line 10, Date business started | If new business, the start date; if existing, the date of hiring first employee |
| Line 12, Closing month of accounting year | December for calendar year; month for fiscal year |
| Line 13, Employees expected | Number of employees expected in the next 12 months |
| Line 16, Principal activity | Brief description (e.g., retail trade, legal services, construction) |
One EIN Per Responsible Party Per Day
The IRS limits online EIN issuance to one per responsible party per day. If you are forming multiple entities and the same individual is the responsible party for all of them, you must apply on separate days or use fax/mail for the additional entities.
Common Uses for an EIN
- Opening a business checking account (banks require an EIN for entities)
- Filing business tax returns (Forms 1065, 1120, 1120-S, 940, 941)
- Issuing W-2s and 1099s to workers
- Applying for business licenses and permits
- Establishing a Solo 401(k) or SEP-IRA as a self-employed individual
- Administering an estate or trust
Changing or Canceling an EIN
Once issued, an EIN is permanent and cannot be cancelled. However, you can close your IRS business account by writing to the IRS if you no longer need the EIN. If your business structure changes (e.g., sole proprietor incorporates), you generally need a new EIN for the new entity.
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Frequently Asked Questions
How long does it take to get an EIN online?
Immediately, you receive it at the end of the online session.
Can I get an EIN before my LLC is officially formed?
Generally no. You should have your state formation documents before applying, because the IRS will ask for the formation date and legal name.
Can a foreign national be a responsible party?
Yes, but they must have an ITIN (Individual Taxpayer Identification Number) or SSN. If they have neither, the entity must apply by mail or fax and include documentation.
What if I made a mistake on my SS-4 after the EIN was issued?
Call the IRS Business and Specialty Tax Line (800-829-4933) to correct information on file.
Does an S-corp need its own EIN separate from the underlying LLC?
An LLC that elects S-corp status keeps its existing EIN. A new S-corp corporation gets its own EIN.
Written by
Ankit Sarawagi, CPA, CA, MBA
Ankit leads the finance team at Profitjets, where he has worked with 500+ businesses across the US on bookkeeping, tax and CFO-level strategy. He writes about the habits that keep small business books accurate all year. Connect on LinkedIn
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