What Is an EIN and Does Your Business Need One?

An Employer Identification Number (EIN) is a nine-digit number assigned by the IRS to identify your business for tax purposes. Think of it as your business's Social Security number.

You need an EIN if your business:

• Has employees (or plans to hire)
• Operates as a partnership, corporation, or multi-member LLC
• Files certain tax returns (excise, employment, alcohol/tobacco/firearms)
• Withholds taxes on income paid to a non-resident alien
• Has a Keogh plan

Even if you don't technically need one, getting an EIN is strongly recommended for any business. Here's why:

• Open a business bank account — Most banks require an EIN for business accounts
• Protect your SSN — Use your EIN instead of your Social Security number on business documents and 1099s
• Build business credit — An EIN is the foundation of your business credit profile
• Hire contractors — You'll need it to issue 1099s

Apply online at irs.gov/ein. The process takes about 10 minutes and you receive your EIN immediately. It's completely free — don't pay a third-party service to do this for you.

What you'll need:

• Your Social Security number (or ITIN)
• Your business's legal name and address
• The type of entity (LLC, sole proprietor, corporation, etc.)
• The reason you're applying

Once you have an EIN, use it — not your SSN — on all business documents, contracts, and tax forms. This reduces the risk of identity theft and keeps your business and personal finances properly separated.

You generally keep the same EIN for the life of your business. You may need a new EIN if you change your business structure (e.g., converting from a sole proprietorship to a corporation).

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