Small Business Taxes

Getting an Employer Identification Number (EIN)

Learn what you need to know about Employer Identification Numbers (EINs). We explain what an EIN is, when you might need an EIN, and how to apply for an EIN.

An Employer Identification Number, (EIN, sometimes called Federal Tax ID Number) is a nine-digit number assigned by the IRS. EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.

You are required to obtain an EIN if you do one or more of the following:

  • Form a C or S corporation or partnership (in this case the EIN serves essentially the same purpose that a social security number does for a sole proprietorship)
  • Pay wages to one or more employees
  • File pension or excise tax returns

A sole proprietorship with no employees, pension plans, or excise taxes does not need an EIN. A sole proprietor can use the social security number for income tax, self-employment, and other tax purposes.

For more detailed information on how to determine whether you should obtain an EIN, refer to the IRS publication Understanding Your EIN. To obtain an EIN you must complete IRS Form SS-4. It is a good idea to apply for an EIN before you open for business so that it will be available when the first taxes must be remitted. Most banks will require an EIN to open a corporateor partnership bank account.

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