The Employer Identification Number is the federal tax identifier for a business, and getting one is among the simpler filings a new owner faces. It is free, it usually takes minutes, and the IRS issues the number immediately through its online application. The complications are almost entirely avoidable and almost entirely about sequence and accuracy: applying before the entity legally exists, entering a name that does not match the state record, or naming the wrong person as responsible party.
This guide covers who needs an EIN, when in the formation sequence to apply, the four ways to apply, and how to fix the problems that surface later. It describes federal procedure as published by the IRS. Whether your particular business needs an EIN, and how it should be taxed, are questions for a qualified tax professional.
File the formation document and wait for acceptance
The application asks for a legal name and formation date that must already be true.
Do not apply before this
Gather everything before you start
The online form times out and cannot be saved and resumed.
Identify the responsible party
A real individual who controls the entity. Never a formation service or registered agent.
Apply directly at irs.gov
Free. Numerous commercial sites charge a fee for the same federal form.
Copy the entity name character for character
From the stamped certificate, including punctuation and the designator.
Save the confirmation notice immediately
It appears once. The original cannot be reissued, only replaced.
Most EIN problems are name mismatches between the state record, the IRS record and the bank.
Step 1: Work out whether you need one
The IRS publishes the criteria, and the common triggers are straightforward. An EIN is generally required where the business has employees, operates as a partnership or a corporation, files employment, excise or certain other returns, withholds tax on income paid to a non-resident alien, or has a Keogh plan. Multi-member LLCs need one because they are treated as partnerships by default.
A single-member LLC with no employees sits in the ambiguous zone. Treated as a disregarded entity for federal tax purposes, it may be able to use the owner's own taxpayer identification number. Many owners apply anyway for three practical reasons: most banks require an EIN to open a business account, clients issuing information returns ask for one, and using an EIN instead of a personal social security number on business paperwork limits how widely that number circulates.
Sole proprietors with no employees frequently have no federal requirement at all, and still often obtain one for the same practical reasons.
Step 2: Get the sequence right
The EIN application asks for the legal name of the entity, the state where it was formed and the date of formation. Those facts must already be true.
Applying before the state has approved your formation filing produces one of two bad outcomes: an EIN attached to a name the state later rejects because it was not distinguishable from an existing entity, or an EIN attached to a name that differs from the one finally registered. Both are fixable and neither is quick.
The correct order is: clear the name, file the formation document, receive the stamped acceptance from the state, then apply for the EIN using the name exactly as it appears on that document.
Step 3: Prepare the information before you start
The online application times out after a period of inactivity and cannot be saved and resumed, so gather everything first.
- Legal name of the entity, character for character as filed, including the designator and any punctuation.
- Trade name, if the business operates under a different name.
- Mailing address, and a street address if it differs.
- State and date of formation.
- Entity type and, for an LLC, the number of members.
- Responsible party name and taxpayer identification number.
- Reason for applying - started a new business, hired employees, banking purposes, changed type of organisation.
- Principal activity of the business and the products or services it provides.
- Expected employees in the next twelve months, if any, and the date wages were or will first be paid.
- Accounting year end, typically December for most small businesses.
Step 4: Understand the responsible party field
This field causes more later trouble than any other, because people treat it as an administrative contact. It is not.
The IRS defines the responsible party as the individual who controls, manages or directs the entity and the disposition of its funds and assets. It must be a natural person with a taxpayer identification number, and the IRS explicitly excludes nominees - a formation company, an attorney acting only as filer, or a registered agent service cannot occupy the role simply because they submitted the paperwork.
Two consequences follow. First, the person named becomes the IRS's point of contact and the individual associated with the entity's federal tax record, which matters if problems arise years later. Second, when control changes - a founder exits, ownership transfers - the IRS expects to be told so the record remains accurate. The change is reported on the form the IRS designates for that purpose, and it is a step that is very commonly overlooked.
Step 5: Choose an application route
| Route | Who it suits | Typical timing |
|---|---|---|
| Online application | Applicants with a US taxpayer identification number | Number issued immediately during published hours |
| Fax (Form SS-4) | Applicants without a US TIN, or where online is unavailable | Several business days |
| Mail (Form SS-4) | No time pressure, or unusual circumstances | Several weeks |
| Telephone | International applicants | During the IRS international line hours |
The online route is the default for anyone eligible. It operates during published hours rather than around the clock, must be completed in a single session, and issues the number on screen at the end. Download the confirmation notice at that moment.
The fax and mail routes use Form SS-4. Complete it carefully, because a rejected paper application restarts the clock. Applicants without a US taxpayer identification number generally cannot use the online system and should follow the SS-4 instructions for their circumstances.
The IRS limits issuance to one EIN per responsible party per day, which occasionally matters for someone forming several entities at once.
EIN application checklist
Formation filing accepted by the state
Have the stamped certificate in front of you before starting.
Entity name copied exactly from the filed document
Including designator and punctuation. Mismatches cause bank and filing problems for years.
Responsible party identified
A real individual who controls the entity, with their taxpayer identification number. Not a service provider.
Business activity and product or service description ready
Short and factual; the application asks for both.
Employee expectations for the next twelve months
Including the date wages are first expected to be paid, if applicable.
Apply directly at irs.gov
Free. Ignore paid intermediaries.
Complete the session in one sitting
The online application cannot be saved and resumed.
Download and save the confirmation notice immediately
Store it with the formation documents and back it up. The original cannot be reissued.
Record the EIN somewhere separate from the letter
In a password manager or company record book, so it is retrievable if the letter is lost.
Use the EIN consistently everywhere
Bank, payroll, state tax registration, invoices and information returns.
Requirements and application routes are set by the IRS and can change. Verify current procedure on irs.gov before applying.
Step 6: Save the confirmation properly
The notice issued when the EIN is assigned is the document banks, payment processors and payroll providers ask to see. The IRS does not reissue it in its original form.
Save the PDF at the moment it appears, store it alongside the formation certificate and the company agreement, and keep a backup somewhere other than the same laptop. Record the number itself separately as well, because the fastest route to a replacement confirmation is a phone call in which you already know the EIN.
If the letter is lost, a replacement confirmation - commonly called a 147C letter - can be requested from the IRS business line, and institutions generally accept it.
Step 7: What happens after the number is issued
The EIN is the key that unlocks the rest of the setup sequence.
Banking. Most institutions require the formation certificate, the EIN confirmation, the company agreement and identification for signatories. Opening a dedicated account immediately, and running every business receipt and expense through it, is what keeps the separation between owner and entity meaningful.
State registration. Many states require separate registration with the revenue or taxation department for sales tax, employer withholding and unemployment insurance. The EIN is generally required to complete those registrations.
Payroll. If there will be employees, the EIN is the identifier for federal employment tax deposits and returns, and payroll setup has its own deadlines.
Information returns. Clients who pay the business may request the EIN on a taxpayer identification request form. Providing the EIN rather than a personal social security number is one of the practical reasons many sole proprietors obtain one.
What belongs with an accountant
This guide covers the mechanics of obtaining a federal tax identifier. It does not address how your business should be taxed, whether an S corporation election makes sense, how to handle payroll obligations, or what to do about an EIN issued to the wrong entity name.
Speak to a CPA or a licensed tax adviser about tax classification and payroll, and to a licensed attorney about entity structure, ownership arrangements and any situation where an EIN record does not match the state record. Both conversations are shorter and cheaper when the formation paperwork is already in order.