When forming a new business you need to get an EIN number, also know as the Employer Identification Number.
An EIN is a unique nine-digit number assigned by the IRS to business entities operating in the United States for the purposes of identification. You will need to form your business before applying for an EIN. When going through the application process, they will ask for the date of business formation and for the business’s legal name.
How do you know if you will need an EIN?
If you answer “Yes” to any of the following questions you will be required to get an EIN:
Do you have employees?
Do you operate your business as a corporation or a partnership?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
Are you involved with any of the following types of organizations?
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Estates
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers’ cooperatives
- Plan administrators
How do I request an EIN?
Luckily, it is pretty easy to set up an EIN. The IRS has an online EIN Assistant that has a step-by-step application process which will help make your business official!
Remember, you must create your business before getting an EIN. Part of the EIN application process involves the IRS asking for your business formation date and legal business name. You will need to register your business and get approval for the business’s name from your state before applying for an EIN.
If you are undecided on what business structure to choose, visit our Selecting a Business Structure blog post.
How Long Will it Take to Get an EIN?
You can usually get an EIN immediately by applying online. International applicants must call 267-941-1099 (Not a toll-free number). If you prefer, you can fax a completed Form SS-4 to the service center for your state, and they will respond with a return fax in about a week. If you do not include a return fax number, it will take about two weeks. Another option is to mail the form. If you mail your completed Form SS-4 (PDF), it can take up to four to five weeks before you receive your EIN. Note, you will need to have an EIN number when you are ready to file a return or make a tax deposit so be sure to give yourself enough time to apply.
- What if I don’t have my EIN by the time my return is due?
Simply write “Applied for” and the date you applied in the space shown for the number. Do not use your social security number.
- What if I don’t have my EIN by the time my deposit is due?
Send your payment to the service center address for your state. Make your check or money order payable to Internal Revenue Service and show your name (as shown on the SS-4), address, kind of tax, period covered, and the date you applied for your EIN.
What if you are Filing for Tax Exempt Status?
Make sure your organization is formed legally before applying for an EIN because all organizations are subject to automatic revocation of their tax-exempt status if they fail to file a required return or notice for three consecutive years. Applying for an EIN helps the IRS know you have legally formed your organization and the three year period begins.
What if I change ownership or structure of my business?
Usually, businesses need a new EIN when their ownership or structure has changed. However, changing your name doesn’t require a new EIN, instead other actions are needed. Check out the IRS guidance on if you need a new EIN.
If you have any additional questions about getting an EIN, we are happy to help you! Reach out to us by clicking here!