What is an EIN number and how do I apply for one?

An Employer Identification Number (EIN) (also called a Federal Tax ID) is a unique nine‑digit number that the IRS assigns to business entities for tax purposes in the US. It’s similar to a Social Security Number (SSN), but for a company instead of a person. The IRS uses EINs to identify businesses on tax returns and official forms. Once issued, an EIN never expires and remains permanently tied to that entity.

Businesses use an EIN on all federal tax forms (e.g. payroll, corporate or partnership tax returns, excise taxes, etc.), and often on state forms too. 

Notably, you should never use an EIN in place of your SSN on personal documents. An EIN is strictly for business activities. In practice, most corporations, LLCs, partnerships, nonprofits, trusts, estates and other formal organisations must have an EIN. Even if a business has no employees (for example, an inactive corporation), it still keeps its EIN.

Who needs an EIN (and who doesn’t)?

By IRS rules, entities that hire employees or file certain business tax returns must have an EIN. For example:

Employers

Any business with one or more employees must obtain an EIN before paying wages or filing payroll taxes.

Corporations and partnerships

Every corporation, even a nonprofit, and every partnership (including multi-member LLC taxed as a partnership) must have an EIN.

Tax-exempt organisations, trusts, and estates

Entities such as charities, pension trusts, or the estate of a deceased person all require an EIN.

Retirement plans

If you set up a pension or Keogh retirement plan, you need an EIN for the plan.

Excise and specialty taxes

If you file excise tax returns (for alcohol, tobacco, firearms, fuel, etc.) or certain ATF tax returns, you need an EIN.

Withholding for foreign persons 

If the business withholds US income tax on payments to non-resident aliens (e.g. foreign workers, investors), an EIN is required.

Business structure changes

Converting a sole proprietorship into a corporation or LLC, adding or removing partners, or other ownership changes generally require a new EIN. Bankruptcy under Chapter 7 or 11 also triggers a new EIN.

Import/export businesses

Importing goods into the US can trigger additional tax registration requirements that use the EIN.

Conversely, sole proprietorships with no employees often don’t need an EIN. By default, they can simply use the owner’s SSN for federal tax reporting. The Census Bureau notes that sole proprietors (especially independent contractors) “use the entrepreneur’s SSN for tax purposes instead of an EIN”. 

However, even sole proprietors gain advantages from having an EIN. For example, it helps keep personal and business finances separate and guards against identity theft. In short, if you form an LLC, corporation, partnership, or hire anyone at all, plan on getting an EIN; only a single-person business with no payroll can strictly skip it.

How to apply for an EIN

Applying for an EIN is free and simple. The IRS provides an online EIN application on IRS.gov that issues your number immediately. (Avoid any third-party sites that charge a fee – the IRS service is free.) The online EIN Assistant is available Monday–Friday, 7 a.m.–10 p.m. Eastern time. You must complete the application in one session (it times out after 15 minutes of inactivity).

To apply online, you need: your business’s legal entity type and formation date, the responsible party’s Social Security Number (SSN) or Individual Taxpayer ID (ITIN), and the principal business address. If you are using the online tool, your principal place of business must be in the US or a US territory. At the end of the session, you will immediately receive a confirmation and can print a copy of your EIN.

For international applications, if your business is outside the US and you have no US residence, you cannot use the online tool. Instead, you may apply by phone, fax, or mail. The IRS toll number for international EIN applicants is (267) 941-1099 (not toll-free), available Monday–Friday. 

Alternatively, you can fax a completed Form SS-4 to the IRS (international fax: 855‑215‑1627 from inside the US, or 304‑707‑9471 from outside). If you mail Form SS-4 from abroad (using the IRS Cincinnati address, Attn: EIN International Operation), expect about 4–5 weeks for processing, similar to domestic mail applications.

Domestic applicants who prefer not to use the web tool can still fax (855‑641‑6935) or mail Form SS-4 to the IRS. Fax applications typically yield an EIN in about 4 business days; mailed applications take ~4–5 weeks. Remember: never pay anyone for an EIN. The IRS does not charge a fee.

EIN applications surged during the Covid relief era. For example, IRS data show ~6.1 million EINs were issued in FY2020 vs about 8.0 million in FY2021 – a ~31% jump in just one year. 

In recent years, the IRS has been issuing roughly 8.2 million EINs per year.

Benefits of having an EIN

Even if you’re not required to have an EIN, it offers practical benefits:

Identity protection

Using an EIN means you do not have to give out your personal SSN on business documents. This separation helps protect you from identity theft and scams. The Census Bureau notes that providing an EIN (instead of an SSN) “can preclude identity theft” for sole proprietors.

Business bank accounts and credit

Most banks and credit unions require an EIN to open a commercial account, especially for formal entities like LLCs or corporations. (Sole proprietorships sometimes get by with just an SSN, but even then, many banks will ask for an EIN or ITIN for verification.)  An EIN is also used to establish your business’s credit profile. By applying for loans, credit cards, or lines of credit in your business’s name (using the EIN), you build a distinct credit history for the company. This helps in getting financing or vendor credit in the future.

Professional credibility

Having an EIN makes your business look more established and legitimate to banks, investors, and customers. It’s usually needed when applying for business licenses or permits.

Required for growth

Any time your business adds employees or incorporates, you will need an EIN. Applying early (even when you’re still a solo operator) means you’re ready if the business grows.

Avoids penalties

If your business should have had an EIN (for example, it filed excise returns or hired employees) and didn’t, you could face filing issues or IRS notices. It’s safer to obtain one and keep it active. There are no penalties or fees for having an EIN you don’t end up using.

Frequently asked questions

What if I don’t use my EIN? 

If you end up doing business without ever giving out the EIN (for example, you continue using your SSN as a sole proprietor), nothing catastrophic happens. There’s no charge or penalty for an unused EIN. However, once an EIN is issued, it stays tied to your business. It’s usually wise to start using it, especially to avoid revealing your SSN.

Can I open a business bank account without an EIN?

Some banks do allow sole proprietors (especially single-member LLCs) to open a basic business account using just a Social Security Number or ITIN. But policies vary widely. Many banks insist on an EIN before approving an account. In general, having an EIN makes the process smoother and ensures the account is clearly in the business’s name, not your personal SSN.

I’m a foreigner and not eligible for an SSN.

Foreign entrepreneurs can still form US businesses. When you apply for an EIN, you simply can’t use the online tool (as you have no US address). Instead, call the IRS at (267) 941‑1099 or send a completed Form SS-4 by fax/mail. On the form, you may enter “Foreign” or “N/A” for the SSN field (Line 7b) if you don’t have one. The IRS will issue an EIN that lets you legally open a U.S. company, hire employees, and open a bank account (banks will usually ask for an EIN if you have no SSN).

When should I apply for an EIN?

As soon as you legally establish your business entity (file articles of organisation/incorporation, partnership agreement, etc.), you can apply for the EIN. In fact, the IRS recommends forming your entity (with the state) first, then getting the EIN. Waiting until right before filing tax forms or payroll can delay reporting. There’s no harm in getting an EIN early – it’s free and permanent for that business.

Do I ever need more than one EIN?

Generally, one business only needs one EIN. An entity typically keeps the same EIN for its lifetime, unless its structure changes dramatically (for example, a sole proprietor incorporates, or there’s a corporate merger). The IRS limits each responsible party to one new EIN per day, so duplicate applications are discouraged. If you ever forget your EIN, you can retrieve it by calling the IRS’s Business & Specialty Tax Line.

Where is the EIN delivered?

If you apply online, you get the number immediately and can print it. If you applied by fax or mail, the IRS will send a confirmation letter (Form CP-575) to the address on file – typically your business’s mailing address – within a few weeks. Keep that letter in your records as official proof of the EIN.

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