Registering an EIN is easy with Tax Shark’s simple and transparent services.
Obtain a Federal EIN if your company has employees, operates as a corporation or partnership, files business taxes, or needs a business bank account.
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Regardless of the business industry or sector, most business owners in the United States need an Employee Identification Number (EIN) to manage their taxes, pay their employees, and prove their business’s identity to the IRS. Find out what an EIN is, what it can do for you, whether you need one, and how to file an EIN application.
An Employer Identification Number (EIN) is a unique nine-digit identification number assigned by the Internal Revenue Service (IRS) to the responsible party of a business entity. The EIN’s primary purpose is to identify an employer’s tax account or specific categories of business owners that don’t have employees. The best way to understand how an EIN works is to view it as the business entity equivalent of the Social Security Number (SSN).
The EIN is also called the Federal Tax ID number or the Federal Employer Identification Number (FEIN). There is no difference, they are simply different terms for the EIN.
In addition to the federally issued EIN, your state of residence may require you to have a state-level tax identification number, referred to as a state tax ID or state EIN. Typically, you’ll need a federal EIN before you can obtain a state tax ID number.
Example: The Florida Department of Revenue requires businesses operating within Florida or hiring Floridian employees to register themselves with the state government and obtain a Florida state tax ID number.
A Taxpayer Identification Number (TIN) is a general category of identification numbers used by the IRS or the Social Security Service (SSA) to identify taxable entities, such as individuals or businesses.
An EIN is one of the five types of TINs. The other four are the Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), Taxpayer Identification Number for Pending U.S. Adoptions (ATIN), and Preparer Taxpayer Identification Number (PTIN).
Example: Albert is a U.S. citizen and owns a corporation employing 23 people in Virginia. Albert has two TINs: a Social Security Number (SSN) identifying him as an individual taxpayer and an Employer Identification Number (EIN) identifying his corporation as a taxable business entity to the federal government.
If your business entity has any employees, you must possess an EIN. Registering with the federal government and receiving an EIN is mandatory before you can hire any employees. This requirement exists because the EIN is needed to create an employee payment plan.
Limited Liability Companies (LLCs), partnerships, and corporations must have an EIN. This requirement includes LLCs with multiple members, regardless of whether they pay taxes as a corporation or a partnership.
The only exception to the rule is single-member LLCs (SMLLCs) which are disregarded entities with no employees or excise tax liabilities. This specific type of business entity does not usually require an EIN and can use the sole member’s SSN in its place on tax returns. However, they can still apply for an EIN if their home state’s tax legislation requires one.
While not all business types need an EIN to open a business bank account, it depends on the business structure. Only SMLLCs and sole proprietorships may open a business bank account without an EIN; the sole member uses their SSN instead. All other business entities need an EIN to open one.
Register your business and complete an IRS Form 3800 to establish and claim business credit. Applying for an EIN isn’t always required; whether you need one depends on your business structure.
According to the IRS, business taxes include income taxes (including self-employment), employment taxes, estimated taxes, and excise taxes.
Per the IRS questionnaire, you need an EIN if your business files employment taxes or excise taxes. It is also necessary for any business that files tax returns to the Bureau of Alcohol, Tobacco, and Firearms, and Explosives (ATF).
Any business that is required to file specific types of special business taxes must possess an EIN.
Per the IRS questionnaire, any business entity that withholds income taxes other than wages for a non-resident alien is required to have an EIN.
If you plan to change your business structure or organization type, you are required by the IRS to obtain a new EIN, even if you did not have one before. Check the IRS guidelines to determine whether you meet the requirements for a new EIN.
Example: Amaryllis Ventures is a corporation based in Delaware and founded in 2017. In 2023, the majority of the company’s stock was purchased by Camellia Holdings, another corporation.
The purchase caused Amaryllis Ventures to become a subsidiary of Camellia Holdings. Per the IRS guidelines, Amaryllis is required to obtain a new EIN.
Whether your business entity needs an EIN depends on its structure and the types of taxes it pays. You may be required to apply for an EIN if your business is a corporation or a partnership, even if you don’t plan on hiring any employees.
The IRS recommends applying for an EIN sufficiently early to ensure you have it when you make a deposit or file a business tax return. Typically, the best time to do so is to apply immediately after forming your business entity and ensuring your business name has been accepted by your state of residence.
While you can submit an IRS Form SS-4 before forming your business entity, doing so is not recommended. If your state does not approve your chosen business name, you risk facing delays and additional paperwork, such as canceling your EIN and applying for a new one.
Tax Shark can help you create a new business entity. Hire us to incorporate, form an LLC, or start a new partnership in your state and ensure you receive your EIN as soon as possible.
No. The federal tax ID number is the EIN, which the IRS issues to identify your business entity. Your state may also issue a separate, state-level tax identification number for the same entity.
No, unless your business entity is a sole proprietorship or a single member LLC (SMLLC) classified as a disregarded entity: no employees, excise tax liabilities, pension plan tax returns, or other EIN requirements.
Even if your business entity permits you to use an SSN, you should consider using an EIN instead. An EIN provides many benefits, such as protecting your identity, filing business taxes, opening a business bank account, and establishing business credit.
Yes. EINs are a type of federal public record, meaning your business’s EIN is public information.
No. An Employer Identification Number (EIN) is a type of Taxpayer Identification Number (TIN). The two should not be confused, as TINs also include SSNs and other identification numbers.
Yes. It’s legal to look up any company’s number. However, using the information for illegal purposes, such as EIN identity theft, is a federal crime.
Yes. While sole proprietors with no employees, pension plan tax returns, or excise taxes do not need an EIN, they can still get one if needed.
Yes. You can get an EIN if your business entity is a corporation, a partnership, or a sole proprietorship.
No. They are two different types of TINs and use different formats. EINs use nine digits comprising a two-digit prefix, a dash, and a seven-digit string (12-1234567). SSNs are nine-digit strings comprising a three-digit area number, a two-digit group number, and a four-digit serial number (123-12-1234).