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EIN numbers are Employer Identification Numbers issued by the federal government of the US. It’s also known as a Federal Tax Identification number.
In other words, this is a national level registration for businesses, whereas most other tax registration, such as acquiring sales tax permits and actually charging sales tax, are done at the state level.
What is an EIN used for?
Employer Identification Numbers are federal tax identifiers that the Internal Revenue Service — the US federal tax authority more lovingly known as the IRS — uses to track your business through the system. They’re only used for tax administration at the national level.
Do you need an EIN number for your business?
According to the U.S. Small Business Administration and the IRS, your business needs an Employer Identification Number if you do any of the following inside the United States:
- Pay employees
- Operate as a corporation or partnership
- File tax returns for employment, excise, or alcohol, tobacco, and firearms
- Withhold taxes on income, other than wages, paid to a non-resident alien
- Use a Keogh Plan (a tax-deferred pension plan)
- Work with certain types of organizations
- Trusts, except certain grantor-owned revocable trusts and IRAs
- Estates
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers’ cooperatives
- Plan administrators
How to apply for an EIN number
Applying for a Federal Tax Identification number is actually quite easy! It’s a free service through the IRS. In fact, the IRS warns that if you come across a site that’s charging you for the application, it might be a scam.
Your application options depend on whether you’re located inside the US (the 50 states and other territories) or abroad. The great news is that this information is provided on the IRS website in English, Spanish, Chinese, Korean, Russian, Vietnamese, and Haitian Creole.
If your business is based in the US
The first step is to choose who’s responsible. All applications will require the full name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the main owner, or other roles such as the principal officer, general partner, grantor, or trustor. This person will be known as “the responsible party.”
Then you can proceed with one of the following options:
Apply online
This is the quickest route. You fill out the online IRS application and the information is validated right there on the page, so don’t close any windows. You should receive your federal business tax ID on the spot! It’s a good idea to download the confirmation certificate for your records.
Apply by fax or snail mail
This route is a bit more old school. To apply by fax or mail, you must fill out the Form SS-4 then send it to the following:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641–6935
An application by fax will take about 4 business days, while an application by mail will take about 4 weeks.
If your business is based outside the US
If you have no primary business location, office, or legal residence in the US, then you’re considered an international business. Unfortunately you don’t have the option to apply online at this time.
Apply by phone
International businesses may call 267–941–1099 (not a toll-free number) to get a federal tax ID. Here are the hours for the phone service:
Monday through Friday
6 am — 11 pm (Eastern Time)
The person making the call must be authorized to receive the number and answer questions from the Form SS-4.
It’s unclear from the IRS website how long this process lasts, but you can ask the agent helping you on the call.
Apply by fax or snail mail
This route is a bit more old school. To apply by fax or mail, you must fill out the Form SS-4 then send it to the following:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: (855) 215–1627 (from within the US)
Fax: (304) 707–9471 (from outside the US)
Again, it’s unclear how long the international application process will take and when you will be assigned your federal tax ID. But generally the IRS says that an application by fax will take about 4 business days, while an application by mail will take about 4 weeks.
What does an EIN number look like?
An Employer Identification Number has 9 digits in the following format: XX-XXXXXXX. A hyphen always separates the first 2 numbers from the last 7.
Where can you find your EIN number after you apply?
If you’ve forgotten, lost or misplaced your number, no worries! Simply call (800) 829–4933 and select EIN from the list of options. Once connected with an IRS employee, tell the agent you can’t remember it. The IRS employee will ask some security questions, then provide the number to you right there over the phone.
The phone service hours are:
Monday through Friday
7:00 am — 7:00 pm (Eastern Time)
What’s the difference from a state tax ID?
The tax systems on a state level are separate from the federal level. You’ll need a state tax ID to comply with local business tax rules. For instance, you need an EIN for federal income tax, and a state tax ID for state-level income tax (if the place where you live has it… 7 of them don’t!).
This is also a completely separate system from sales tax. Sales tax is a consumption tax that customers pay you when they make a purchase, similar to VAT or GST in other parts of the world. Then you must remit the money to the state government. Yep, US sales tax operates on a more local level, and sales tax rules vary by state.
Once you’re done with the EIN number process, you might need to register for sales tax. When the time comes, Quaderno can help your business stay compliant with local sales tax rules and grow with peace of mind.
* At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or accountant.
