An Employer Identification Number (EIN) is a nine-digit federal tax identification number issued by the Internal Revenue Service. It identifies a business or other entity for federal tax administration. The IRS issues EINs free of charge.
What an EIN is used for
Depending on the entity and its activities, an EIN may be needed to:
- File federal business, employment or excise tax returns.
- Hire employees and operate payroll.
- Identify a partnership or corporation for federal tax purposes.
- Meet special reporting requirements, including those that can apply to a foreign-owned U.S. disregarded entity.
- Apply for a business bank account, merchant service, license or vendor account when the provider requests one.
An EIN is not a business license, immigration benefit, work permit, credit approval or substitute for state registration.
Form the entity first
The IRS advises applicants to form a legal entity through the relevant state before applying for its EIN. The legal name on the EIN application should match the formation document. Applying too early can create mismatches that later need to be corrected.
Identify the responsible party
The responsible party is the individual who ultimately owns or controls the entity or exercises ultimate effective control over it. Except for government entities, the IRS requires a person rather than another entity to be named as the responsible party.
Use the responsible party’s SSN or ITIN when required. The Form SS-4 instructions explain when a foreign applicant who does not have and is not eligible for an SSN or ITIN may enter “foreign” or “N/A” on line 7b.
Choose the correct application route
Online application
The IRS online service is generally for applicants whose principal business is located in the United States or U.S. territories and who can provide the required taxpayer identification information. If approved, the EIN is normally issued during the online session. The IRS limits issuance to one EIN per responsible party per day.
International applicants
If the principal place of business is outside the United States, the IRS currently allows international applicants to apply by telephone or submit Form SS-4 by fax or mail using the international instructions. Processing times can change, so use the current IRS page rather than relying on a promised turnaround.
Third-party designee
A third party can assist when properly authorized. Form SS-4 includes a third-party designee section, and the applicant should understand exactly who is being named and what authority is being granted.
Information to prepare
- The entity’s exact legal name and any trade name.
- The mailing address and physical location.
- The entity type and state or country of formation.
- The responsible party’s details.
- The reason for applying.
- The expected number and type of employees, if any.
- The first date wages were or will be paid, where relevant.
- The business’s principal activity and products or services.
- The closing month of the accounting year.
After the EIN is issued
- Save the IRS confirmation with the permanent company records.
- Use the legal name and EIN consistently across tax, payroll and financial accounts.
- Do not share the number unnecessarily; business identity theft is possible.
- Use Form 8822-B to report address, location or responsible-party changes. Responsible-party changes generally must be reported within 60 days.
- Confirm the entity’s tax-return and information-reporting obligations with a qualified professional.
Common EIN mistakes
- Applying before the entity has been formed.
- Using a formation service or nominee as the responsible party.
- Selecting the wrong entity or tax classification.
- Submitting duplicate applications when a response is delayed.
- Assuming the EIN itself determines immigration, tax or banking eligibility.
Need an EIN as part of establishing the company? Business Establishment supports the practical formation sequence and EIN coordination, including cases involving international founders.
