What is an Employer Identification Number?

The Employer Identification Number (EIN) is also referred to as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number.

An EIN is used to identify a business entity. An EIN is a designated nine-digit number that identifies your firm or company in various business interactions. The IRS will assign the EIN in the following format: XX-XXXXXXX. As a business owner, you will need to create an EIN not only for tax purposes but also for opening a bank account and applying for various business licenses. As soon as you decide to operate a business, you should apply for your EIN number. Your business law attorney can help you navigate the application process.

Your EIN may play a key role in helping you acquire financing and startup funds for your business. An EIN is necessary when any company has employees on the payroll. Companies that do not have employees but operate as a corporation or partnership must obtain an EIN.

The IRS has made it easy for you to decide if your company needs an EIN. You can review the EIN guide, which lets you know if your business should have an EIN number. Also, you can ask your business law attorney who can further explain the importance of having an EIN. Some of the other reasons to have an EIN include:

  • Starting or purchasing a business
  • Creating a Trust, Estate or Non-Profit
  • Forming a Limited Liability Company
  • Establishing a Corporation or Partnership
  • Filing a Tax Return
  • Death of an Individual
  • Complying with the Internal Revenue Service

The IRS uses the EIN to locate taxpayers who are required to file various business tax returns. Individuals who are employees may choose to use their Social Security Number or obtain an EIN. However, an EIN is not considered to be sensitive information, and business owners can freely distribute EINs via the internet and other public sources without fear of fraud. You have various ways to apply for your EIN. You can apply for an EIN via online, fax, mail, or telephone.

The Internet EIN application is the preferred way for persons to apply for and obtain their EIN. After you complete your application, the information is validated through an online session. Your EIN is issued immediately. The online application process is open to business owners with offices located in the United States or U.S. Territories.

Taxpayers can fax the completed Form SS-4 application to the applicable fax number. If your application contains all the necessary information, your EIN will be faxed back to you within four business days.

If you mail your EIN application, it will take about four weeks to process. Make sure the Form SS-4 contains all the required information. You can learn where to mail your Form SS-4 on the Where to File Your Taxes (for Form SS-4) page.

International applicants may apply for an EIN by calling 267-941-1099 between 6 AM and 11 PM Eastern Time, Monday through Friday. The individual making the call should be the person authorized to receive the EIN and capable of answering the questions on Form SS-4. Complete the Third Party Designee section, if you want to authorize another person to answer questions on Form SS-4 for you. However, the designee’s authority ends at the time the EIN is assigned and released to you.

You can let your business law attorney assist you in applying for your EIN to ensure you are taking the proper steps and help you understand the importance of an EIN to your business.