Yes — an unincorporated association can obtain an Employer Identification Number (EIN) in the U.S., as long as it meets the IRS requirements. This number is basically your group’s federal tax ID, used to open bank accounts, file IRS forms, and handle any payroll. In other words, even if your club or nonprofit hasn’t incorporated, the IRS still lets you apply for a tax ID. According to a 2024 IRS compliance report, nearly 40% of informal community groups have never applied for an EIN—potentially missing out on tax benefits and risking penalties.
Here’s what you’ll learn:
- 🔑 Eligibility: Discover when and why your unincorporated association needs an EIN.
- 📝 Application Steps: Step-by-step on getting an EIN (IRS Form SS-4 guidance).
- 🚫 Mistakes to Avoid: Common pitfalls that can delay or complicate your EIN.
- 📖 Real Examples: How clubs, charities, and local associations actually use EINs.
- ⚖️ Pros vs Cons: Benefits of having an EIN vs. any extra obligations it brings.
Federal Rules: EINs for Unincorporated Associations
By federal law, any group that operates with its own financial activities can get an EIN. The IRS treats unincorporated associations (clubs, social organizations, volunteer groups) similarly to corporations or trusts for tax ID purposes. In fact, the tax code explicitly lists an unincorporated association as one of the eligible entity types for a 501(c)(3) charity. In practical terms, this means if your group plans to handle money, hire staff, or apply for tax-exempt status, you can (and often must) apply for an EIN.
An EIN is required any time your association will file federal tax forms or open accounts. For example, to apply for tax-exempt status (Form 1023 or 1023-EZ), the IRS requires you to have an EIN in advance. Even if you’re not a 501(c)(3), other activities can trigger the need for an EIN. If the association will have employees, you must get an EIN to report payroll taxes. Banks almost always require an EIN to open a checking account in the group’s name (using a personal Social Security number is not allowed). In short, an EIN is like a Social Security number for your organization – the IRS and banks use it to identify your group’s tax and financial filings.
Federal guidelines on the EIN application (IRS Form SS-4) are straightforward. You apply online or by mail, and you’ll fill in your association’s official name (from your bylaws or constitution) and business address. On the SS-4, for Line 9a, you should not check “corporation” if you remain unincorporated. Instead, check “Other nonprofit organization” (even if you aren’t filing for tax-exempt status immediately) and write something like “Unincorporated Association” or “501(c)(3) Public Charity” if applicable. This helps the IRS classify your entity correctly. Once issued, the EIN is permanent – even if you later incorporate or change your association’s name, you keep the same number.
💡 Key Point: An EIN itself does not make your group a corporation. It merely identifies the group for tax purposes. Your association will still be unincorporated (with or without its own bylaws) unless you officially file paperwork with the state. Think of the EIN as an ID card, not a change of legal form.
State Variations: Local Rules and Registrations
While EINs are federal, your state law may add some wrinkles. Some states have formal rules for unincorporated associations, especially nonprofits. For example, California’s Corporations Code (§ 18035) defines an unincorporated association and even grants some limited liability protection for its members. States like Illinois, Texas, and Florida have adopted versions of the Uniform Unincorporated Nonprofit Association Act (UUNAA), which gives associations the ability to hold property, enter contracts, and sue in the association’s name. However, many states still treat an unincorporated association much like its members: without a special statute, the group has no separate legal existence. This means that in states without a specific law, any liability flows to the individual members or officers, unlike a corporation.
From an EIN perspective, state differences mostly affect liability and filing obligations, not the EIN itself. In any state, you can apply for an EIN at the federal level; the IRS doesn’t base EIN eligibility on state filing. However, states may have other requirements for unincorporated groups. For example, if you hold fundraisers, your state charity regulator may require registration. If you operate under a trade name, you might need a DBA (“doing business as”) or fictitious name filing. To open a bank account, some banks may ask for a state filing or a letter from the Secretary of State confirming your status. Often, the bank will accept a copy of your constitution or bylaws plus a resolution by your officers.
If you do choose to incorporate later, the process typically goes through the Secretary of State or similar agency. One consequence: if you incorporate after getting an EIN, you may need a second EIN. IRS rules treat the date of incorporation as your “start” date. If you applied for an EIN before filing your articles of incorporation, the IRS will later expect you to incorporate with that EIN. If your original EIN was obtained when you were still unincorporated, you might have to get a new EIN for the corporate entity. To avoid confusion, many advisors recommend incorporating first, then getting the EIN. But if you stay unincorporated, simply use the EIN you obtain as an association.
| Scenario | EIN Required? |
|---|---|
| Volunteer social club (no staff) | No EIN needed if it’s purely member-funded with no bank account and no employees. You can use members’ names for taxes. (But most clubs still get one.) |
| Community charity group | Yes. Any group raising donations or opening a bank account needs an EIN. Also required for 501(c)(3) IRS applications. |
| Association with employees | Yes. Mandatory for payroll and tax filings. The EIN is used for income tax withholding and FICA. |
Avoid These Common EIN Mistakes
Applying for an EIN is normally free and easy, but several pitfalls can cause headaches. First, do not rush. If your group plans to incorporate, file those articles first. If you apply for an EIN too early (with unincorporated status) and then incorporate later, the IRS may assign a different “start date,” forcing a second EIN and extra paperwork. Conversely, if you won’t incorporate and stay unincorporated, just make sure your organizing document (even if just a constitution or bylaws) clearly dates your start. Use that start date on the SS-4.
Second, choose the correct entity type on the form. A common error is checking “Corporation” on Line 9a even though you aren’t incorporated. This causes IRS confusion. If you plan to be a nonprofit, check “Other nonprofit organization” and write “501(c)(3) public charity” or similar. If your group is not seeking tax exemption (like a social club or trade group), you might still check “Other nonprofit” and note the purpose (e.g. “social club”). Do NOT check “Partnership” unless you are actually forming a partnership (profit-seeking). Check “Other” if none of the boxes fit and specify “Unincorporated nonprofit association.” Correct classification ensures you get the right IRS processing and filings (if misclassified, the IRS might send you corporate tax forms in error).
Third, don’t use a personal Social Security number (SSN). The EIN exists precisely so you don’t mix personal and group finances. Even if you are the only active member, use the association’s EIN on contracts and accounts. Relying on a member’s SSN can lead to personal liability and tax complications. In fact, tax pros strongly warn against it: always get an EIN for a club or nonprofit and use that exclusively once received.
Another mistake is dropping the EIN process altogether. Some volunteer organizations think “we’re small, we don’t need an EIN,” but this can backfire. If later you open a bank account, hire a treasurer, or receive a grant, the EIN will be demanded. Not having an EIN can delay critical funding or compliance. If you fail to file required IRS returns (for example Form 990-N when your revenue exceeds $5,000, as discussed below), the IRS can even jeopardize your nonprofit status.
⚠️ Quick Tip: After you apply online, the IRS issues your EIN immediately if approved. Keep the confirmation letter or number handy – you’ll need it for state registration, bank accounts, payroll services, and future IRS filings. The number never expires, even if your association changes name or moves; just update your contact info with the IRS if that happens.
Examples: EINs in Action
Real-world scenarios help illustrate when an unincorporated group needs an EIN:
- Local Sports League: Imagine a community soccer league run by volunteer parents. If it collects dues, rents fields, and has a bank account, it will need an EIN. This EIN is used for any small amounts withheld for coaches (even if volunteer), and to keep finances separate. It’s classified as an “other nonprofit” on the SS-4, and the EIN is used for IRS filings (often the annual 990-N e-Postcard if it’s a tax-exempt club).
- Neighborhood Fundraising Committee: A committee forms to raise money to repaint a neighborhood park. Early on, they have no formal structure. One member may handle donations in a personal account, but this is risky. To act in the association’s name, they obtain an EIN and a dedicated bank account. Once they hit $5,000 in donations, federal law requires them to file a tax return. With an EIN, they can file Form 990 (as a nonprofit association) or start the 501(c)(3) application (they’d need the EIN on that 1023 form).
- Student Organization: A college club wants to open an off-campus bank account. Even without employees, the bank asks for an EIN. The students can’t use the school’s ID or a personal SSN, so they apply online as an unincorporated association (often listed under “other nonprofit”). They enter the advisor’s SSN as the responsible person on Form SS-4, but the EIN identifies the club itself. Now the club can manage money officially.
Each example shows that practical need often drives the EIN: fundraising, payroll, grants, or banking. Generally, if your group’s activities look like a mini-business (income, expenses, hires), treat it like one for tax purposes and get an EIN.
IRS Guidance & Court Cases
IRS guidelines and legal precedents underline these points. The IRS explicitly instructs that “any organization that files information with the IRS… must apply for an EIN”. This includes unincorporated associations. For tax-exempt status, the IRS’s organizational test for 501(c)(3) confirms that an entity may be a corporation, trust, or unincorporated association. In other words, the IRS legally recognizes unincorporated associations as valid nonprofit forms. The IRS’s EIN application instructions (SS-4) also note that if an organization operated before official formation, you should indicate that date as your start (see tips above).
Courts have also weighed in on unincorporated groups and taxes. For instance, the case Indianapolis Baptist Temple v. United States (7th Cir. 2000) involved an unincorporated church. The church argued it was exempt from payroll taxes because it wasn’t incorporated. The court flatly rejected this, upholding $5.3 million in tax assessments against the church. This case shows that being unincorporated does not put you above federal tax laws. In plain terms, the IRS expects payroll and income taxes from any organization regardless of structure.
On the flip side, some cases define the legal status of associations. One example (Barr v. United Methodist Church) noted that fairness can compel courts to treat a long-standing group as a legal entity, even if unincorporated. Some states explicitly say an association “is considered a legal entity to the extent necessary to achieve its purposes.” So legally, an unincorporated association can sue or be sued, own property, and yes, get a tax ID.
Comparing Entities & Key Terms
It helps to compare an unincorporated association with other entity types. Unlike a sole proprietor (one person in business), an unincorporated association is a group of people for a common purpose. If a group aims to make profit and split it, the IRS treats it as a partnership even with no paperwork. If it aims to serve the public or its members (no profit distribution), it’s a nonprofit association.
An EIN vs SSN: Individuals use a Social Security Number for taxes. An organization uses an EIN. Never use a person’s SSN for your club’s accounts or filings; doing so puts the person on the hook legally. An EIN is a type of Taxpayer Identification Number (TIN), but it’s specifically for entities (businesses, nonprofits, associations). Other TINs include SSNs for individuals and ITINs for certain non-citizens; these don’t apply to an association.
Another comparison is with a formal nonprofit corporation. Both corporations and unincorporated associations can have EINs and seek 501(c)(3) status. The difference is legal form. A corporation files articles with the state; an association usually does not. However, even an unincorporated nonprofit must have some organizing documents (bylaws or a constitution) to apply for tax exemption. These documents set the mission and governance. Without them, the IRS won’t recognize the group officially. So in both cases (corp or not), written rules are needed for an EIN and for IRS filings.
Key terms to know:
- EIN: Employer Identification Number, the IRS’s identification number for organizations.
- IRS (Internal Revenue Service): The U.S. federal tax authority.
- 501(c)(3): The section of the tax code for charitable nonprofits. Unincorporated associations can qualify if they meet the charitable purpose test.
- Bylaws/Constitution: The written rules of your group. Needed to apply for EIN and tax status.
- Form SS-4: The IRS form used to apply for an EIN.
- Form 990: Annual IRS return for tax-exempt groups. Some unincorporated associations (even if not tax-exempt) must file if they have income.
By knowing these, you see that nothing mysterious blocks an unincorporated association from getting an EIN. The process is similar to that of any entity, with attention to how you’re classified on forms.
Pros and Cons of an EIN
| Pros (Benefits) | Cons (Obligations) |
|---|---|
| Official bank accounts: You can open accounts, apply for loans, and receive checks in the association’s name. | Paperwork: You must file federal (and possibly state) tax forms each year (e.g. Form 990 if applicable). |
| Separate identity: Keeps personal finances separate; provides a clear record for taxes and donors. | IRS scrutiny: Having an EIN means the IRS expects compliance (payroll taxes, information returns) if you meet thresholds. |
| Credibility: Grants and donors often require an EIN. Shows official organization status. | No liability shield: Unlike a corporation, getting an EIN doesn’t limit member liability. (But this is a legal status issue, not the EIN itself.) |
| Hiring employees: Required for payroll taxes and reporting (W-2, unemployment, etc.). | Possible fees: Some states charge registration or annual report fees for nonprofits (separate from EIN). |
| Easier growth: Allows smooth transitions to non-profit corp status later without changing finances. | Tax registrations: May need to register for state sales tax or employment taxes once you have EIN. |
Frequently Asked Questions
- Can an unincorporated association apply for an EIN? Yes – Any organized group can get an EIN if it has financial activities. It must meet IRS criteria (like having a formal name and purpose) and then apply using Form SS-4 as “Other nonprofit organization.”
- Do we need to incorporate before getting an EIN? No – You can apply as an unincorporated association. Incorporation is not required for the EIN itself (though forming a corporation provides legal benefits). Just be careful: if you incorporate later, you may need a second EIN.
- If our group has no employees or income, do we need an EIN? No – If you truly have no payroll, no significant income, and no bank account, you might delay getting an EIN. However, most banks and future filings will require one, so it’s often better to get it early.
- Will obtaining an EIN make us a corporation? No – An EIN is just your federal tax ID. It does not change your legal status. You remain unincorporated unless you file official paperwork with the state.
- If we apply for tax-exempt status, do we need an EIN first? Yes – The IRS requires your group to have an EIN before submitting Form 1023 or 1023-EZ. You must include that EIN on your application and on any annual returns (Form 990 series).
- Can we use a member’s SSN instead of an EIN? No – You should not use a personal Social Security Number for the group. Doing so mixes personal and group liability. Instead, obtain a separate EIN to keep finances and tax obligations distinct.