How to Get an EIN for Your Business (Free From the IRS)
If you are starting a business, learning how to get an EIN is one of the first tasks on the list. An EIN, or Employer Identification Number, is a nine-digit federal tax ID for your business. Banks, payroll providers, and the IRS use it to identify the company. The good news is that the process is free and often takes only minutes.
What is an EIN?
Think of an EIN as a Social Security number for your business. The IRS issues it, and it stays with the business for its life. You will use the number on tax returns, bank applications, and hiring forms.
An EIN is also called a Federal Employer Identification Number, or FEIN. Despite the name, you do not need employees to get one. Many one-person businesses have one too.
Who needs an EIN?
The IRS requires an EIN in many cases. For example, you generally need one if you:
- Have employees.
- Run the business as a corporation or a partnership.
- Have an LLC with more than one member.
- File certain federal tax returns, such as excise tax returns.
A single-member LLC with no employees may not need one for federal income tax. In that case, the owner can often use their own Social Security number. Even so, many owners apply for one anyway. Banks often ask for one to open a business account. It also keeps your Social Security number off forms you hand to clients.
How to get an EIN online
The IRS offers a free online application. According to the IRS EIN page, if your application is approved, the number is issued right away online.
Before you start, gather a few details:
- Your business’s legal name and address.
- Your entity type, such as LLC, corporation, or sole proprietorship.
- The name and Social Security number or ITIN of the responsible party. This is the person who controls the business.
- The reason you are applying, such as starting a new business.
Then answer the questions and submit. When the number appears, save the confirmation notice right away. You will need it for your bank and your records.
Other ways to apply
The online tool does not work for everyone. For instance, if your main place of business is outside the U.S., the IRS says to apply by phone, fax, or mail instead. These methods take longer, so plan ahead.
Never pay for an EIN
Here is the most important tip. The IRS states that you never have to pay a fee for an EIN. Even so, many websites charge to file the form for you. Some even look official.
To avoid them, go straight to irs.gov. Check the address bar before you enter any personal details. If a site asks for a credit card, you are not on the IRS application.
How to get an EIN as part of a bigger setup
Your EIN is one step in forming a business. First, choose your structure. Our guide on choosing between a sole proprietorship, S corp, or LLC covers the main options.
Next, form the entity with your state if needed. Most states also require an LLC to name a registered agent. Our guide to the LLC registered agent explains that role.
After that, apply for your federal tax ID. Then you can open a business bank account and keep your business money separate from your personal funds.
After the IRS issues your number
Keep the IRS confirmation letter in a safe place. You may need it to open accounts or prove your number later. In addition, update your records if the business changes. For example, a change in ownership or structure can mean you need a new number.
Finally, keep the number private. Share it only with banks, vendors, and agencies that truly need it.
The bottom line
Knowing how to get an EIN saves you time and money. Apply directly with the IRS, have your details ready, and save your confirmation. The process is free, and in many cases the number arrives in minutes.
This article is for general education and is not tax or legal advice. Check irs.gov for current requirements.
