How to Get an EIN

An Employer Identification Number, or EIN, is a nine-digit number the IRS assigns to identify a business for tax purposes. It works a bit like a Social Security number for a company, and it appears on tax returns, on bank applications and on forms you give to payment platforms.

Getting one is simple for many businesses and confusing for others, especially for owners outside the United States. And because many websites sell the number for a fee, beginners often pay for something the IRS gives away. This guide explains who needs an EIN, how the process works and what to avoid. It is based on the IRS's own guidance as it stood when written, so check the IRS website before you apply. It is general information, not legal, tax or financial advice.

What an EIN is for

An EIN identifies your business to the IRS. You may need one to:

• file business tax returns
• hire employees
• open a business bank account
• apply for some business licenses and permits
• give a platform or customer a tax form for your business

The number is not a license to operate, and it does not by itself create a company.

Do you need one?

Not every business does. In general:

• an LLC or corporation will almost always need one
• a business with employees needs one
• a sole proprietor with no employees may be able to use a Social Security number for tax purposes, though some banks and platforms still ask for an EIN
• some partnerships and other entities need one

Rules depend on your entity type and your activities. The IRS website has questions you can answer to see whether you need one, and a tax adviser can confirm.

The EIN is free

The IRS states plainly: you never have to pay a fee for an EIN. It also cautions you to beware of websites that charge for it. Some of these sites look official, use IRS-style colors and ask for large fees to submit a form you could file yourself.

Apply only through the IRS website or by the IRS's own phone, fax or mail routes. If a page asks for a payment, leave.

How to apply online (US businesses)

The IRS online tool is for domestic entities. According to the IRS, you can use it if:

• the organization was formed in the United States or a US territory and its main place of business is there
• you are the responsible party or an authorized representative
• you have the responsible party's Social Security number or individual taxpayer identification number

Other points the IRS makes about the online process:

• the application must be finished in one session and cannot be saved
• the session expires after 15 minutes of inactivity
• you can apply for only one EIN per responsible party per day

If you are forming an LLC or corporation, the IRS advises forming it with the state first, or the application may be delayed.

If you are outside the United States

The IRS says you cannot use the online tool if your principal place of business is outside the US. In that case, the instruction is to apply by phone, fax or mail.

This is the situation for many international students and foreign founders who form a US company from abroad. The phone numbers, fax numbers, mailing addresses and the form to use are on the IRS website, so read them there rather than on a third-party site, because they change. The page on forming a US LLC from abroad in this section describes the surrounding steps.

Be honest on every form. The IRS asks who the responsible party is, meaning the person who controls or manages the entity, and giving false information can cause delays and problems.

Who is the responsible party?

The responsible party is the individual who ultimately owns or controls the entity and its funds. It is not a lawyer or a formation service you hired. If you use a service, check that it lists you as the responsible party and not itself.

Common mistakes

• Paying a website. The IRS charges nothing, and paid services often add little.
• Applying before the LLC exists. The IRS advises forming the LLC with the state first.
• Using the wrong entity type. The form asks what kind of entity you are, and a wrong answer can cause tax confusion later.
• Listing a service as the responsible party. You should be the responsible party, in most cases.
• Losing the confirmation letter. Save it as a PDF and keep a printed copy.
• Sharing the number carelessly. Give it to banks, payment platforms and the IRS, not to strangers.

What to do after you have it

Once you have the EIN:

1. Save the IRS confirmation letter in two safe places.
2. Use it on tax filings, bank applications and platform tax forms.
3. Tell your payment platforms and marketplaces if they need the number.
4. Keep the entity's details consistent with what you gave the IRS, such as name and address.
5. If your address or ownership changes, check the IRS rules on updating your information.

EIN versus other numbers

An EIN is different from:

• a Social Security number, which identifies a person
• an ITIN, an identification number the IRS issues to certain people who need to file US taxes and are not eligible for a Social Security number
• a state tax ID or sales tax permit, which come from a state, not from the IRS
• a business license number, issued by a city, county or state

Some of these may be required in addition to an EIN. The sales tax page in this section explains when a state registration comes into play.

Student and visa considerations

Having an EIN does not give you permission to work in the US. Whether you may own a business or work for one depends on your visa. Ask your school's international office before you form a company or apply, and keep their answer in writing.

Walking through the application questions

The form asks a small set of questions, and knowing them in advance saves time:

• Entity type. Sole proprietor, partnership, LLC, corporation or another type. For an LLC, you also say how many members it has, which affects how the IRS treats it.
• Reason for applying. Starting a new business, hiring employees, banking or another reason.
• Responsible party details. The name and tax identification number of the person who controls the entity.
• Business details. Name, address, the state of formation, the start date and the main activity.
• Employees. Whether you expect to hire, and roughly when.

Take your time with each answer. Mistakes are fixable but can cause letters from the IRS and delays with banks.

Keeping the number safe

An EIN is not as sensitive as a Social Security number, but it can be misused. Share it with banks, payment platforms, your tax preparer and the IRS. Be wary of anyone who asks for it by message without a clear reason. Store the confirmation letter in a secure place, and keep a copy off your main computer.

Changing your details later

If your business name, address or structure changes, the IRS has rules about when you must tell it and how. A change from a sole proprietorship to an LLC, or adding members, can affect whether you need a new number. Check the IRS guidance before you assume the old number still applies, and ask a tax adviser if you are unsure.

When a paid service might make sense

The EIN itself is free, but some people pay a lawyer or a formation service to handle the whole company setup, including the application, because they want help with the entity, the operating agreement or the foreign-owner steps. That can be reasonable. The test is what you are paying for. Paying to have someone submit a form you could file in minutes is poor value. Paying for advice on structure, tax filings and compliance can be worth it. Ask for a clear list of what is included and make sure the service lists you as the responsible party.

Questions to ask yourself before applying

• Do I know what type of entity I am, and have I formed it first if needed?
• Do I have the responsible party's tax identification number, or do I need the phone, fax or mail route?
• Am I applying through the IRS and not through a lookalike site?
• Do I know where I will save the confirmation letter?

The bottom line

An EIN is a free number from the IRS that identifies your business. US-based businesses can usually apply online, and applicants whose main place of business is outside the US apply by phone, fax or mail. Form your LLC first, apply only through the IRS, never pay a website for it and save your confirmation letter.