Free Guide to Getting an Employer Identification Number

What Is an Employer Identification Number and Why You Might Need One

An Employer Identification Number, commonly called an EIN, is a nine-digit identification code that the Internal Revenue Service assigns to businesses, nonprofit organizations, and other entities. The format always looks like this: XX-XXXXXXX. Think of it as a Social Security number for your business rather than for you as an individual. The IRS uses this number to track tax records, monitor business accounts, and maintain compliance with federal tax laws.

You might need an EIN for several reasons. If you plan to hire employees, the IRS requires that you have an EIN before you can put anyone on your payroll. Banks also typically need an EIN to set up a business bank account, which keeps your personal finances separate from your business finances. If your business structure is a partnership, corporation, or limited liability company (LLC), you will almost certainly need an EIN. Some sole proprietors—people who run businesses by themselves—may also obtain one, though it is not always required.

The good news is that obtaining an EIN costs nothing. The IRS does not charge any fee for issuing an EIN, and no private company or service should charge you money to get one either. Some businesses benefit from having an EIN even if they are not legally required to have one, because it can help them build business credit and protect their personal credit from business debts.

According to IRS data, the agency issued approximately 3.8 million EINs in 2022. This shows how common it is for business owners to go through this process. Whether you are starting a small online business, launching a nonprofit, or beginning a partnership with other people, understanding how the EIN system works is a practical first step.

Practical Takeaway: An EIN is a free nine-digit number issued by the IRS that businesses use for tax purposes and banking. It is required if you have employees, run certain business structures, or want to set up a business bank account.

Who Needs to Obtain an Employer Identification Number

The IRS has specific rules about who must have an EIN and who may choose to get one. Understanding which category applies to you will help you determine your next steps. The requirement depends on factors such as your business structure, whether you have employees, and the amount of money your business makes.

If you operate as a corporation or LLC, you must obtain an EIN. The IRS considers these business structures separate legal entities, so they need their own tax identification numbers regardless of whether you have employees. Similarly, if you form a partnership with one or more other people, your partnership must have an EIN. This is true even if the partnership has only two partners and no other employees.

Sole proprietors—people who run a business by themselves—do not always need an EIN. If you are a sole proprietor with no employees, you may report business income using your personal Social Security number. However, many sole proprietors choose to get an EIN anyway. Some reasons include wanting to keep business finances completely separate from personal finances, building business credit history, or simply keeping their Social Security number private in business dealings.

If you plan to hire any employees, you must obtain an EIN before those workers start. The IRS requires it so they can track payroll taxes and ensure you are withholding the correct amount from employee paychecks. If you run a nonprofit organization, you will need an EIN to maintain your tax-exempt status and file required annual reports. Certain business types—such as farms with specific income levels, trusts, and estates—also have EIN requirements.

The IRS reports that businesses with payroll accounts represent a significant portion of EIN holders. In 2021, over 7 million businesses had active payroll accounts, and virtually all of them use EINs to manage those accounts.

Practical Takeaway: You must have an EIN if you have employees, operate as a corporation or LLC, run a partnership, or manage a nonprofit. Sole proprietors without employees may get one but are not required to do so.

How to Get an Employer Identification Number Through the IRS

The Internal Revenue Service provides multiple methods for obtaining an EIN, and each method has different advantages depending on your situation and how quickly you need the number. All methods are free and official, meaning you should never pay anyone to obtain your EIN for you.

The fastest method is to obtain your EIN online through the IRS website. You can visit irs.gov and use the online EIN application tool. This method is available to U.S. citizens and resident aliens who have a Social Security number or Individual Taxpayer Identification Number. The online application takes about 15 minutes to complete, and the IRS typically provides your EIN immediately upon submission. You receive a confirmation page with your number, which you should print and save. This same-day service makes the online method ideal for people who need their EIN quickly to open a bank account or hire employees soon.

If you prefer to apply by telephone, you can call the IRS Business and Specialty Tax Line at 1-800-829-4933. A representative will guide you through the application questions over the phone. You need to have specific information ready, including your Social Security number, the legal name of your business, and details about your business structure and activities. The phone method typically takes about 15 minutes as well, and the IRS will give you your EIN over the phone immediately. This method works well for people who want direct guidance or who have questions during the application process.

Mail and fax are slower options, but they work if you cannot use the online or phone methods. You complete Form SS-4, which is the official EIN application form, and mail it to the IRS address for your state. Processing times for mailed applications usually take 4 to 6 weeks. Faxed applications typically take 2 to 4 business days. You would only choose these methods if you have no internet access and prefer not to call.

A tax professional, such as a CPA or tax attorney, can also apply for an EIN on your behalf. This is particularly helpful if you find the process confusing or if you are already working with a tax professional to set up your business. The professional charges a fee for this service, but they handle all the paperwork and obtain the number for you.

Practical Takeaway: Use the online method at irs.gov for immediate results, call 1-800-829-4933 for phone assistance, or mail Form SS-4 if you prefer. All official methods through the IRS are free.

Information You Will Need to Provide When Applying

Regardless of which method you use to obtain an EIN, the IRS will ask you for the same core information. Gathering these details before you start your application makes the process much faster and helps you avoid mistakes that could delay your number.

You will need your Social Security number or Individual Taxpayer Identification Number, as well as your date of birth. This identifies you as the person responsible for the business. If you are applying on behalf of a business you own, you must be authorized to do so, and the IRS verifies this through your identification.

Next, you need the legal name of your business exactly as it appears in your business registration documents or formation papers. This is not necessarily a "doing business as" name—it is the official legal name. If you have already registered your business with your state, use the exact name from that registration. You will also provide the business address where the company operates or will operate. This should be a physical street address, not just a mail box. If you do not yet have a permanent location, you may use your home address temporarily.

The IRS asks about your business structure: are you a sole proprietor, partnership, S corporation, C corporation, LLC, nonprofit, trust, or another type? You need to describe what your business does—for example, whether it is retail, manufacturing, consulting, or another industry. This helps the IRS categorize the business for statistical purposes.

You must indicate when your business starts or started. If you are applying before the business officially begins, provide your expected start date. If the business already exists, provide the date it began. You also need to state whether this is a new business, a change in business structure, or something else.

If you have employees or plan to hire them, you should know approximately how many you will have and when you plan to start their payroll. This helps the IRS set up the proper payroll tracking