Is an EIN Actually Required for an LLC? – Don’t Make This Mistake + FAQs

Lana Dolyna, EA, CTC

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If you’re launching a new LLC, you’re not alone. The U.S. saw a record 5.4 million new business applications in 2021, and a large share of those were for LLCs. LLCs have exploded in popularity thanks to their flexibility and protection.

Yet many new LLC owners share a common confusion: Is an EIN required for an LLC? We’ll break down exactly when an LLC needs an EIN (Employer Identification Number), what types of LLCs must have one, and when you might choose to get one even if it’s not mandatory.

Quick Answer: Do You Need an EIN for Your LLC?

So, is an EIN required for an LLC? It depends on your LLC’s situation. Not all LLCs are required to have an EIN.

Single-member LLCs (one owner) with no employees and no special tax obligations do not legally need an EIN. In these cases, the LLC’s owner can use their personal Social Security Number (SSN) for IRS purposes. The IRS treats a single-member LLC as a “disregarded entity” (essentially invisible for federal income tax) unless you choose otherwise. So if you’re the sole owner, you can file taxes under your own SSN without obtaining an EIN, as long as you have no employees and no excise taxes or pension plan filings.
Multi-member LLCs (more than one owner) do need an EIN. If your LLC has two or more members, the IRS by default treats it as a partnership for tax purposes. Partnerships must have their own tax ID (EIN) to file a partnership tax return. Even if a multi-member LLC elects to be taxed as a corporation, it’s a separate entity that also requires an EIN. So any LLC with multiple owners is required to obtain an EIN.
Any LLC that has employees (even just one) must have an EIN. The “E” in EIN stands for Employer, and indeed, if your LLC hires employees, the IRS requires an EIN to handle payroll taxes, regardless of whether the LLC has one owner or many.
LLCs with certain tax obligations also need an EIN. For example, if your LLC needs to file federal excise taxes (for things like certain fuel, alcohol, tobacco, or firearms businesses) or if it sets up a retirement plan (Keogh plan), the IRS will require an EIN for those filings. Likewise, if a single-member LLC elects to be taxed as an S-Corp or C-Corp, it is no longer disregarded and will need its own EIN.

In short: A single-member LLC without employees (and no special filings) does not have to get an EIN by law. But every other type of LLC – including multi-member LLCs, any LLC with employees, or LLCs electing corporate taxation – is required to have an EIN.

However, even single-member LLCs that aren’t required to have an EIN often choose to get one. Why? Because an EIN can be extremely useful (for opening bank accounts, protecting privacy, and more). We’ll explore those reasons soon. First, let’s ensure you avoid some common pitfalls related to EINs.

Avoid These 5 Common EIN Mistakes by LLC Owners

Even savvy entrepreneurs can slip up when it comes to EINs. Here are five common mistakes LLC owners should avoid:

Assuming “No Employees” Means No EIN in All Cases – If you’re a single-member LLC with zero employees, it’s true the IRS doesn’t require an EIN. But don’t assume that means you’ll never need one. The moment you take on a business partner (making your LLC multi-member) or hire even a single employee, an EIN becomes mandatory. Also, certain filings like excise taxes or an S-Corp election require an EIN regardless of employee count. Avoid: forgetting to get an EIN when your LLC’s situation changes.
Using One EIN for Multiple Businesses or LLCs – Each LLC is a separate legal entity. An EIN is unique to a single entity. A common mistake is thinking you can reuse an EIN from another business or use one EIN for several LLCs. In reality, you need a separate EIN for each LLC (just as each person has their own SSN). If you start a second LLC, it will need its own EIN if it meets the requirements. Don’t try to save time by recycling EINs – the IRS will not allow it.
Not Getting a New EIN After a Major Ownership Change – EINs are issued to an entity under a certain structure. If your LLC’s structure changes, you might need a new EIN. For example, if you start as a one-member LLC (no EIN needed initially) and later add a partner, that LLC now must file as a partnership – meaning you should apply for a new EIN for the restructured entity. Similarly, if a multi-member LLC downsizes to one member (ending the partnership), the partnership’s EIN typically shouldn’t be used for the now single-member LLC going forward. Failing to update the EIN in such transitions can cause tax filing confusion. Avoid: continuing to use an old EIN when your LLC’s tax classification has fundamentally changed.
Delaying or Skipping an EIN for Practical Needs – Maybe the IRS doesn’t require your single-member LLC to have an EIN, but practically, you will need one to do important things. Opening a business bank account in your LLC’s name almost always requires an EIN (banks rarely open an account under an LLC’s name using just an individual’s SSN). Also, if you’ll be issuing or receiving Form 1099s (common for contractors), having an EIN avoids putting your SSN on every form. Some LLC owners delay getting an EIN because it’s “not required,” only to hit a wall when a bank, client, or vendor asks for the EIN. Avoid: holding up your business operations – get the EIN in advance if you plan to do any banking, hiring, or large transactions.
Paying for an EIN (or Falling for Scams) – An EIN is free to obtain directly from the IRS. A mistake some new owners make is paying a third-party service a hefty fee to “file paperwork” to get an EIN, or worse, falling for internet scams that ask for money for an EIN. Avoid: paying anything for an EIN application. You can apply online on the IRS website in minutes at no cost. Third parties might offer to handle it, but it’s usually unnecessary. Also be wary of fake websites – always go through IRS.gov for your EIN.

By sidestepping these mistakes, you’ll save yourself headaches and ensure your LLC stays compliant. Next, let’s clarify some terminology – knowing the key terms will make the detailed info easier to digest.

Key Terms Explained: EIN, LLC, and More

Before we dive deeper, let’s define some critical terms related to EINs and LLCs. Understanding these will help make sense of the rules:

Employer Identification Number (EIN): A unique 9-digit number issued by the IRS to identify a business entity for tax purposes. Think of it as the business equivalent of a Social Security Number. It’s also called a Federal Tax ID or FEIN (Federal Employer Identification Number). Despite “Employer” in the name, you don’t need to have employees to get an EIN – it’s simply a tax ID for an entity.
Limited Liability Company (LLC): A flexible business structure formed under state law that provides personal liability protection to its owners (called members). An LLC can have one member (single-member LLC) or many members (multi-member LLC). By default, an LLC’s profits are passed through to owners’ tax returns (no corporate income tax by default), but an LLC can choose different tax classifications. LLCs are popular for small businesses because they’re simpler than corporations but still offer liability protection.
Single-Member LLC (SMLLC): An LLC with only one owner. By default, the IRS treats a single-member LLC as a “disregarded entity.” This means for federal income tax purposes, the LLC is not separate from the owner. (It’s as if you’re a sole proprietor in the IRS’s eyes, even though legally the LLC is separate.) Disregarded status lets you report the LLC’s income on your personal tax return (Schedule C, E, or F, depending on the activity). Important: A single-member LLC can use the owner’s SSN for tax filings, and is not required to have an EIN unless it meets certain conditions (like hiring employees). It can elect to be treated as a corporation for tax, but that’s optional.
Multi-Member LLC: An LLC with two or more owners (members). By default, the IRS treats a multi-member LLC as a partnership for tax purposes. The LLC must file a partnership tax return (Form 1065) and issue K-1 tax forms to the members, reporting each one’s share of income. Because the LLC is filing its own return, it must have its own EIN. (Alternatively, a multi-member LLC can elect to be taxed as an S-Corp or C-Corp, but it still remains a separate tax entity requiring an EIN either way.)
Disregarded Entity: A business entity that is separate in a legal sense but ignored (disregarded) for federal tax filing. A single-member LLC is the classic example. If you don’t elect corporate taxation, your one-owner LLC doesn’t file a federal income tax return on its own – it’s reported under your personal return. Note: Disregarded only refers to income tax. For other taxes (like payroll or excise), the LLC can’t be disregarded – it must act as a separate entity if those taxes apply.
Partnership (Tax Classification): When we say a multi-member LLC is treated as a partnership, we’re talking about a tax classification. It means the IRS expects a partnership return from the LLC. This is distinct from a legal partnership (LLC offers liability protection which a general partnership wouldn’t). A partnership-type LLC must have an EIN to file its return. If the LLC later has just one member or elects corporate tax, its tax classification changes and so might its EIN requirement.
S Corporation (S-Corp): Not a different business entity, but a tax election that an LLC (or corporation) can make. An LLC can file Form 2553 to elect to be taxed under Subchapter S of the IRS code. This often is done to allow the owner(s) to be treated as employees for part of the income, potentially saving on self-employment taxes. If an LLC elects S-Corp status, it is treated like a corporation for tax purposes (must file a corporate tax return, Form 1120S). An EIN is required in this case, because the LLC is no longer disregarded for tax – it’s a separate taxable entity. (If your single-member LLC didn’t have an EIN before, you’d need to get one once you elect S-Corp.)
C Corporation (C-Corp): Another tax classification an LLC can choose (via Form 8832). If an LLC elects to be treated as a C-Corp, it files Form 1120 and pays corporate taxes. It will need an EIN for that, as a distinct taxable entity. (Most small LLCs don’t go C-Corp route unless seeking certain kinds of funding, but it’s good to know.)
Foreign LLC: This term can mean two things, so context matters. (1) In state law terms, a “foreign LLC” is simply an LLC that was formed in one jurisdiction but is registering to do business in another. For example, if you formed your LLC in Delaware but also operate in California, your LLC is “foreign” in California. (2) In a tax context, “foreign-owned LLC” typically means an LLC formed in the U.S. that is owned by a non-U.S. person or company. Why does this matter for EINs? If an LLC’s owner is not a U.S. citizen or resident and doesn’t have an SSN, the only way to identify that LLC for the IRS is via an EIN. Foreign-owned single-member LLCs are required to get an EIN (and have additional IRS filing obligations like Form 5472). So if you see “foreign LLC” in this article, we’ll specify which sense we mean. Generally, foreign-owned LLCs definitely need EINs, whereas an out-of-state (foreign-qualified) LLC uses the same EIN it already has.
Taxpayer Identification Number (TIN): Any number used to identify a taxpayer. SSNs, EINs, and ITINs (Individual Taxpayer ID Numbers for those who can’t get SSNs) are all TINs. For an LLC, the relevant TIN is either an EIN or, if single-member with no EIN, the owner’s SSN.

Now that we’ve clarified the jargon, let’s see how these concepts play out in real-life scenarios. Below are examples of different LLC situations and whether they required an EIN.

Real-World Examples: When LLCs Need an EIN (and When They Don’t)

Sometimes it helps to see concrete examples. Here are several hypothetical LLC scenarios to illustrate when an EIN is required and when it’s optional:

Example 1: Solo Entrepreneur, No Employees – “Disregarded” Single-Member LLC
Jenna is the sole owner of Jenna’s Craft Designs LLC, operating out of her home. She has no employees and hasn’t elected any special tax status for her LLC. Jenna files the LLC’s business income on her personal tax return (Schedule C). Does she need an EIN?
No. In this situation, Jenna’s LLC is a classic single-member LLC with no employees and no excise tax or pension obligations. The IRS does not require an EIN for her LLC. Jenna can simply use her own SSN when filing taxes. However, Jenna decides to apply for an EIN anyway. Why? She wants to open a separate business bank account for her LLC and keep her finances separate. The bank requires an EIN to open an account for an LLC. Additionally, Jenna occasionally works with corporate clients who will send her 1099 forms; having an EIN allows her to provide that instead of her SSN, protecting her privacy. In practice, even though it wasn’t mandatory, getting an EIN made Jenna’s life easier and more secure.
Example 2: Growing Business with a Partner – Multi-Member LLC
Alex and Maria launch Sunrise Web Solutions LLC together. They are equal partners (each a member of the LLC). They have no employees yet, just the two of them working as owners. Do they need an EIN?
Yes. The moment an LLC has more than one member, it is no longer taxed like a sole proprietorship; it’s now a partnership (unless they elect corporate taxation). Sunrise Web Solutions LLC must file a partnership tax return (Form 1065) at tax time, and that cannot be done under a personal SSN. So Alex and Maria apply for an EIN for their LLC as soon as it’s formed. They use the EIN when they file taxes and when opening a business bank account. Even without outside employees, multi-member LLCs are required to have an EIN to handle their federal tax filings. (Alex and Maria also find that having an EIN helps when they later register for a state business tax permit.)
Example 3: Hiring Employees – Single-Member LLC that adds staff
Isaac is the sole owner of Mountain Peaks Photography LLC. Initially, it’s just him (single-member, no special tax election). He didn’t get an EIN when he formed the LLC because he had no need at first – it was just him and no employees. A year later, business is booming and Isaac hires an assistant and a second photographer. Does he need an EIN now?
Yes, absolutely. Once Isaac decided to hire employees, his LLC became an employer. That triggers the requirement for an EIN. He’ll need an EIN to set up federal payroll tax accounts, to withhold and remit taxes for his employees, and to issue W-2s at year-end. In fact, Isaac applied for an EIN before running his first payroll to ensure everything was set up properly. This example shows that an LLC might not need an EIN on Day 1, but as soon as you plan to hire someone, getting an EIN is one of the first steps.
Example 4: Changing Tax Classification – S-Corp Election for an LLC
Robyn owns Robyn’s Consulting LLC as a single-member. After a year of good profits, she consults a tax advisor and elects to have her LLC taxed as an S-Corporation to save on self-employment taxes. Robyn starts paying herself a salary from the LLC’s earnings. Does this LLC need an EIN?
Yes. When Robyn’s LLC was a one-person show with no employees and default tax status, an EIN was optional. But after the S-Corp election, her LLC is treated like a separate corporation for tax purposes. It must file a corporate tax return (Form 1120S) and run payroll for her salary. An EIN is required for both of those tasks. Robyn obtained an EIN for her LLC around the time she filed the S-Corp election. This enabled her to set up a payroll system and ensure the IRS and state tax agencies recognize her business as a distinct tax entity. Lesson: if your LLC’s tax status changes (S-Corp, C-Corp, partnership, etc.), you’ll need an EIN if you didn’t have one already.
Example 5: Non-US Owner – Foreign-Owned Single-Member LLC
Sofia is a citizen of Spain who formed Global Tech Innovations LLC in Delaware, USA. She is the only owner of the LLC (single-member) and has no U.S. employees yet. Being a non-U.S. person, Sofia doesn’t have an SSN. Does her LLC need an EIN?
Yes. Foreign-owned LLCs are a special case: even though Sofia’s LLC is single-member with no employees (which normally wouldn’t require an EIN), the fact that the owner is a foreign person means the LLC must get an EIN. The IRS requires any U.S. entity that is at least 25% foreign-owned to file information returns (Form 5472) – and you can’t do that without an EIN. Moreover, Sofia will use the EIN when opening a U.S. bank account for the business and when dealing with the IRS for any taxes. Global Tech Innovations LLC applied for an EIN through the IRS’s online process (foreign owners can also apply via mail/fax using Form SS-4 if they don’t have an SSN). Bottom line: an LLC owned by a non-U.S. individual or company always needs an EIN for IRS reporting, even if it’s a “disregarded” single-member LLC.
Example 6: Operating in Multiple States – The EIN Stays the Same
Zhang formed Zenith Marketing LLC in his home state of Illinois. Later, his business expanded and he registered Zenith Marketing LLC as a foreign LLC in Michigan and California to legally do business there. Does he need a different EIN for each state?
No. Zenith Marketing LLC is one legal entity, just authorized in multiple states. It uses one EIN federally, and that same EIN is used whenever needed in other states. When Zhang registered in Michigan and California, those states asked for his LLC’s FEIN (Federal Employer ID Number) on various forms, but he did not need to obtain a new EIN for each registration. However, if Zenith Marketing LLC hadn’t already had an EIN, Zhang would likely get one because operating in multiple states often entails things like state tax IDs, bank accounts in each state, etc. Each state will typically use the federal EIN to track the business for state tax filings. The key is that an LLC only ever has one EIN, no matter how many states it operates in. (If Zhang decided to create a separate LLC for California, that would be a new entity requiring its own EIN, but that’s not what he did here.)

These examples cover most common situations: purely single-member LLCs, multi-member partnerships, adding employees, changing tax classification, and foreign ownership. As you can see, the EIN requirement kicks in once your LLC goes beyond a one-person/one-owner operation without employees. Even if not required, there are often practical reasons to get an EIN early on.

Next, we’ll consolidate these scenarios into an easy reference and compare requirements side by side. We’ll also discuss some state-specific nuances that might affect your decision to obtain an EIN for your LLC.

EIN Requirements by LLC Type and State: A Comparison

To make it crystal clear, let’s compare EIN requirements based on different LLC structures, tax statuses, and circumstances. The table below breaks down common scenarios and whether an EIN is required:

LLC Scenario	EIN Required?	Details/Reason
Single-Member LLC (one owner), no employees, default tax (disregarded)	No (optional)	Not required by IRS. The owner can use personal SSN since the LLC is disregarded for federal taxes. However, an EIN is optional and often recommended for privacy, banking, and future needs.
Single-Member LLC with employees	Yes	Required. If the LLC has even one employee, it must have an EIN to report payroll taxes and comply with federal law.
Single-Member LLC with excise tax or retirement plan filings	Yes	Required. Needed if the LLC files federal excise taxes (fuel, tobacco, etc.) or sets up a Keogh retirement plan, etc. These filings demand an EIN.
Single-Member LLC electing S-Corp or C-Corp tax status	Yes	Required. Once taxed as a corporation, the LLC is a separate tax entity. It must have an EIN to file corporate tax returns and issue any required documents (like W-2s to owner-employees in an S-Corp).
Multi-Member LLC (two or more owners)	Yes	Required. By default treated as a partnership. The LLC must have its own EIN to file a partnership return (Form 1065) or if it elects S/C-Corp, for those returns. No option to use an owner’s SSN.
Foreign-Owned LLC (single-member, owner has no SSN)	Yes	Required. The only way to identify a U.S. LLC with a foreign owner is via EIN. Plus, IRS rules mandate EIN for foreign-owned disregarded LLCs (for information reporting like Form 5472).
Foreign (Out-of-State) LLC (an LLC registering to do business in another state)	No new EIN	Not required to get a new EIN. The same EIN is used nationwide. When registering an LLC in multiple states (foreign qualification), you provide the existing EIN to states. (If the LLC didn’t have one yet, you might obtain it for ease, but no separate EIN per state.)

Note: In all cases where “Yes” is indicated, you should obtain an EIN as soon as possible, ideally right after forming the LLC or before the triggering event (hiring, adding members, etc.). It’s free and easy to get from the IRS, and having it ready will save time when filing taxes or opening accounts.

State-Specific Nuances for LLC EIN Requirements

While the EIN is a federal tax ID, there are some state-level considerations and variations to be aware of. No state can require a separate “state EIN” (the EIN from the IRS is used), but state laws and procedures might effectively nudge you to get an EIN. Here are a few nuances:

Bank Account Requirements (e.g., Florida): States don’t mandate EINs for formation, but practically, you’ll need one to operate. For example, in Florida, you can form an LLC without an EIN, but every bank will require the EIN to open a business account for your LLC. So, while Florida law doesn’t say “you must have an EIN,” the banking industry standard in Florida (and most states) effectively makes an EIN necessary to do business banking. The same goes for many other states – if you plan to separate your finances (which you should for an LLC), an EIN is needed to open those accounts.
State Tax Registration (e.g., New York, Texas): If your LLC needs a state tax ID or license, having an EIN is often a prerequisite. For instance, New York requires businesses to register for sales tax if selling goods; the application will ask for your EIN (or SSN if sole prop). Texas requires LLCs to file a franchise tax report annually – while you can file it using the state-assigned taxpayer number, you typically provide your EIN as well. Any state that has payroll taxes (state unemployment insurance, state income tax withholding) will require your federal EIN to set up those accounts once you hire employees. In short, when dealing with state tax agencies, an EIN is usually needed to identify your business.
California Franchise Tax and Filings: California requires every LLC, even single-member disregarded LLCs, to pay an $800 annual franchise tax and file Form 568 (LLC return). If you’re a single-member LLC in CA, you actually report your income on your personal return and file a short LLC form for the state. On those state forms, you’ll need to provide either your SSN or EIN. Many California LLC owners get an EIN to use on state forms and payments, even if they have no federal requirement for one, because it keeps their SSN off the paperwork. Additionally, California’s LLC annual filings and any city business licenses will ask for an EIN.
Local Business Licenses: In some cities or counties, when you apply for a local business license for your LLC, the form might ask for your EIN. They usually accept an SSN if you don’t have an EIN, but providing an EIN is preferable as it signals you are properly set up, and again, protects your SSN. So while not required by law, having that EIN makes state and local compliance smoother.
State EIN vs. State Tax ID: Sometimes people get confused by “state tax ID.” To clarify, your EIN (Federal Tax ID) is used for federal matters and is often used as an identifier in state systems. Some states will issue your business a separate state ID for certain taxes (like a sales tax permit number or employer account number), but you usually need to supply your EIN to get those. No matter the state, you won’t have to get a second EIN – one EIN from the IRS is all your LLC ever needs.

Takeaway: No U.S. state outright requires every LLC to have an EIN just to exist, but various state and local regulations effectively make EINs necessary for conducting normal business activities (banking, hiring, paying taxes). It’s wise for nearly all LLCs to obtain an EIN early, so you’re prepared for any state or financial requirements that arise.

Having covered the ins and outs of EIN requirements, let’s wrap up with some frequently asked questions that address common queries and edge cases.

FAQs: EIN Requirements for LLCs

Do I need an EIN for a single-member LLC with no employees?

No. A single-member LLC with no employees (and no special tax filings like excise taxes) is not required to have an EIN. In this case, the owner can use their personal SSN for federal tax purposes. However, if you plan to hire in the future, open a business bank account, or just want privacy, you may still opt to get an EIN preemptively.

Does a multi-member LLC require an EIN?

Yes. Every multi-member LLC (an LLC with two or more owners) needs its own EIN. The IRS treats multi-member LLCs as partnerships by default (or as a corporation if you elect), and the business must file its own tax return. An EIN is necessary to file those returns and handle any tax compliance for the entity.

Do I need an EIN to open a business bank account for my LLC?

Yes, in most cases. Banks almost always require an EIN to open a bank account for an LLC. Even if you’re a single-member LLC that isn’t required to have an EIN by the IRS, banks prefer (and usually demand) an EIN as the business ID. This is to ensure the account is truly for a business entity. So practically speaking, get an EIN before you go to open a business bank account – it will be needed.

Can I use my SSN instead of an EIN for my LLC?

Yes, if you qualify, you can use an SSN in limited situations. If you own a single-member LLC with no employees (and you haven’t elected corporate tax status), the IRS allows you to use your personal SSN as the LLC’s taxpayer ID for filings. But remember, the moment you take on employees or an additional owner, you can no longer use your SSN – an EIN becomes required. Also, using an EIN from the start (even if not required) can be safer for your privacy and simplifies paperwork with other businesses.

Can one EIN be used for multiple LLCs?

No. An EIN is unique to a specific business entity. You cannot use the same EIN for two different LLCs. If you operate multiple LLCs, each one will need its own EIN (whenever it meets the criteria for needing an EIN). Think of it like separate Social Security Numbers for different people – one person can’t share their SSN with another. The same goes for businesses and EINs.

Should I get an EIN for my single-member LLC even if it’s not required?

Yes, it’s usually a good idea. Even when the IRS doesn’t require an EIN (for a single-member LLC with no employees), many owners choose to get one anyway. Obtaining an EIN is free and simple, and it offers benefits. It helps protect your privacy (so you’re not giving out your SSN on W-9 forms or contracts), makes opening business bank accounts and credit cards easier, and prepares your business to grow (you’ll already have the EIN if you hire someone or bring on a partner later). In short, an EIN can lend credibility and flexibility to your LLC, so it’s often worth getting from the start.

Do foreign-owned LLCs need an EIN?

Yes. If your LLC is owned by a non-U.S. individual or entity, it must obtain an EIN. A foreign-owned single-member LLC, for example, is required to get an EIN to satisfy IRS filing requirements (such as Form 5472 reporting). Additionally, without an SSN for the owner, the EIN becomes the primary tax ID for all U.S. dealings. So any LLC with foreign ownership will need an EIN regardless of employee count.

Can I form an LLC without an EIN initially?

Yes. You can legally form an LLC with your state without having an EIN. Many people file the Articles of Organization first, then apply for the EIN from the IRS. There’s no problem in doing so. Just keep in mind you’ll need to get an EIN before you do certain things like open bank accounts, file taxes as an LLC, or hire employees. It’s often easiest to apply for the EIN right after your LLC is approved by the state, so you have it ready.