Definition
A unique nine-digit number assigned by the IRS to identify a business entity for tax reporting purposes, functioning as the business equivalent of a Social Security Number.
UK Context
Best Practices
- Apply for an EIN as one of the first steps when establishing a new business entity
- Safeguard the EIN as you would a Social Security Number — it can be used for identity theft
- Include the EIN on all employment tax filings, W-2s, 1099s, and correspondence with government agencies
- Obtain a new EIN when the business undergoes structural changes such as incorporation or converting from sole proprietorship to LLC
Frequently Asked Questions
How do I apply for an EIN?
The fastest method is the IRS online EIN application at IRS.gov, which issues an EIN immediately upon completion. You can also apply by phone (for international applicants), fax (Form SS-4, 4-day processing), or mail (Form SS-4, 4-week processing). There is no fee.
Does a sole proprietor need an EIN?
A sole proprietor with no employees can use their Social Security Number for tax purposes. However, an EIN is required if the sole proprietor hires employees, has a Keogh plan, or files excise tax returns. Many banks also require an EIN to open a business account.
Can a business have more than one EIN?
Each business entity should have only one EIN. However, if a business creates a new entity (such as opening a subsidiary), changes its organisational structure, or is involved in a merger, a new EIN may be required for the new entity.