Key takeaways:
An employer identification number, or EIN, is a unique, nine-digit number issued by the IRS, and is used to identify a business entity for tax purposes. An EIN is also commonly referred to as a federal taxpayer ID number (TIN) or a Federal Employer Identification Number (FEIN).
While EIN, federal tax ID, and other identification terms are often used interchangeably, there are subtle differentiations in their meaning.
The IRS uses taxpayer ID numbers (TINs) to manage, apply, and enforce tax laws. TIN is an umbrella term for different types of federal taxpayer IDs, which are issued by two federal agencies, the IRS or the Social Security Administration.
An EIN is one type of TIN issued and used by the IRS. A social security number, issued by the Social Security Administration, is another. Certain entities can choose between the two. A single-member LLC disregarded for tax purposes and a sole proprietorship both have the option of obtaining an EIN or using the owner’s SSN when filing a tax return, unless they are otherwise required to obtain an EIN. For example, if they have employees or file employment or excise taxes, they must obtain an EIN.
Since the EIN is issued by a federal agency, it is also frequently called a federal tax ID or a Federal Employer Identification Number (FEIN). This helps to distinguish it from state-issued tax ID numbers. (Adding to the confusion are states that issue their own employer identification numbers. California is an example of a state that issues a “state employer identification number” or SEIN.)
Many businesses will need to obtain an EIN. An EIN is required if your business meets any of the following criteria:
Along with tax reporting, banks and financial institutions require their clients to have an EIN to open a business bank account. Vendors may also require that your business provide an EIN to pay any of your invoices. Even if you don’t need an EIN for federal tax purposes, you can still request one for these other purposes.
Note: An LLC with more than one owner must obtain an EIN since it is operating as either a partnership or a corporation. The IRS defines a multi-member LLC as a partnership for federal income tax purposes unless it files Form 8832 and elects to be treated as a corporation.
Single-member LLCs (an LLC with one owner) and sole proprietorships are not required to obtain an EIN unless they meet one of the criteria listed above. For example, a business with at least one employee is required to have an EIN.
Even if your business is not required to have an EIN, there are benefits to having an EIN. These include helping to keep your personal and business finances separate and to discourage personal identity theft. If you are a single-member LLC or a sole proprietor, you may be able to operate your business using your Social Security Number as your TIN. But remember, for tax purposes your number will be shared with clients, partners, vendors, tax agencies, and others, creating potential privacy and identity theft concerns. Using an EIN can reduce the risk of exposing your SSN to unauthorized parties.
Related: Do I need an EIN for my LLC?
You get an EIN by applying to the IRS. Before applying for an EIN, a domestic business will need the name and the taxpayer identification number (TIN) of the “responsible party”. A responsible party is an individual who controls, manages, or directs the business entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be a natural person, such as a principal officer, general partner, owner, grantor, or trustor.
There are several ways to obtain an EIN. EIN applications can be made online or by mail or fax.
If you are an international applicant, you can apply for an EIN by phone or by submitting Form SS-4 by mail or fax. The individual who makes the phone call must be authorized to receive the EIN and address any questions about the information provided on Form SS-4.
You can also obtain an EIN by using a service provider.
Is an EIN the same thing as a state tax ID?
A state tax ID and a federal EIN are two different types of numbers that can be used to identify a business.
A federal EIN is used to identify your business for both federal and state tax reporting purposes. The EIN is issued by the IRS and can be used in all states in which you operate.
A state tax ID, also known as a state tax registration number, is assigned by a state tax department and is used to identify a business for various state tax purposes. However, a state tax ID is specific to the issuing state. If you expand into other states, you may need to obtain state tax ID numbers in each state where you operate.
Is an EIN the same as a TIN?
TIN, which stands for taxpayer identification number, is an identification number used by the IRS in the administration of tax laws.
An EIN (also referred to as a federal tax ID or Federal Employer Identification Number (FEIN)) is a type of TIN. Other types of TIN include the Social Security Number, individual taxpayer identification number (ITIN), taxpayer identification number for pending U.S. adoptions (ATIN), and preparer taxpayer identification number (PTIN).
How do I obtain an individual tax identification number (ITIN)?
If you do not have a Social Security Number, you must have an ITIN to apply for an EIN. To obtain an ITIN from the IRS, complete and mail IRS Form W-7. You can get started by printing Form W-7 and the instruction sheet.
Can I reuse the federal tax ID number (EIN) from my sole proprietorship?
If you change your business structure or ownership, generally you will need a new EIN. For example, if you are a sole proprietor with an existing EIN and decide to form an LLC or corporation, you must obtain a new EIN for your LLC or corporation.
Can I use the same EIN for multiple businesses?
You may be able to use one EIN for multiple business locations, but you should have only one EIN for the same business entity.
For example, if you operate a landscaping business and wish to expand to other locations, you are not required to get a new EIN. But if you want to form another LLC (say for a different type of services company, like a pool installation company), you will need to obtain another EIN for that business.
Is there a limit on EINs?
The IRS allows you to obtain multiple EINs (although only one per business entity). However, the IRS will issue only one EIN per responsible party per day. If your business set up involves multiple entities, you will need to allot extra time for obtaining your EINs or use a service provider.
How do I find my EIN?
If you've forgotten your EIN, you can look for it on -
If you're authorized to receive the EIN, you can also call the IRS to obtain it over the phone after they verify your identity.
