What is an EIN?
Understand what an Employer Identification Number is, why you need one, and how it differs from other tax identifiers.
What Does EIN Stand For?
EIN stands for Employer Identification Number. It's a unique nine-digit identifier assigned by the Internal Revenue Service (IRS) to business entities for tax purposes. Every business structure—from sole proprietorships to corporations—may need an EIN.
EIN Format
EINs are formatted as XX-XXXXXXX (two digits, a hyphen, and seven digits). For example: 12-3456789. This format is standardized across all IRS documentation.
Who Assigns EINs?
Only the Internal Revenue Service (IRS) can assign EINs. You cannot obtain an EIN from any other government agency or private organization.
Why Do You Need an EIN?
An EIN is essential for most business operations. Here are the main reasons you might need one:
Hiring Employees
If you plan to hire employees, you must have an EIN. It's required to withhold and report payroll taxes.
Opening a Business Bank Account
Most banks require an EIN to open a business bank account. This helps separate your personal and business finances.
Filing Business Taxes
Corporations, partnerships, and LLCs must use an EIN when filing business tax returns.
Business Credit
An EIN is necessary to establish business credit and apply for business loans or lines of credit.
Legal Requirements
Certain business structures (corporations, partnerships, LLCs) are legally required to have an EIN.
EIN vs. Other Tax Identifiers
It's important to understand the difference between an EIN and other tax identification numbers:
EIN vs. SSN
An EIN is for businesses, while a Social Security Number (SSN) is for individuals. Sole proprietors can use their SSN instead of an EIN if they don't have employees.
EIN vs. ITIN
An ITIN (Individual Taxpayer Identification Number) is for non-U.S. citizens who need to file taxes. An EIN is for business entities.
EIN vs. Tax ID
EIN and Tax ID are often used interchangeably, but technically a Tax ID can refer to any tax identification number (SSN, ITIN, or EIN).
How to Get an EIN
You can apply for an EIN through several methods:
Online Application
The IRS allows you to apply online through their website. This is the fastest method and provides immediate confirmation.
By Phone
You can call the IRS at 1-800-829-4933 to apply for an EIN. You'll need to provide business information and will receive your EIN immediately.
By Mail
You can mail Form SS-4 to the IRS. This method takes longer (2-4 weeks) but doesn't require internet access.
Through a Service
You can use a professional service like ours to handle the application process. We can often expedite the process and ensure accuracy.
What Information You'll Need
When applying for an EIN, you'll need to provide:
Business Information
Legal business name, doing business as (DBA) name, business address, and business type.
Responsible Party Information
Name, address, and Social Security Number of the person responsible for the business.
Business Details
Reason for applying for an EIN, expected number of employees, and business start date.
Ready to Get Your EIN?
Now that you understand the process, start your application today and get your EIN in as little as 4 hours.
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