Employer Identification Number Internal Revenue Service

employer identification number definition

In the same manner, the IRS assigns Employee Identification Numbers (EINs) to businesses, usually when they are newly established. An Employer Identification Number–also called a Federal Employer Identification Number–is a code issued to businesses to identify those companies for federal tax purposes. Like a Social Security Number, every EIN is unique to a single business. An employer identification number (EIN) is a unique nine-digit number that is assigned to a business entity. Every business needs an employer identification number to report taxes.

With sole proprietors, the tax ID is their Social Security number or their EIN. With corporations, partnerships, trusts, and estates, this number will remain an EIN. Applying for an EIN is free and an application form is available online on the IRS website. The online application form can easily be completed and submitted electronically. Simply visit the IRS website and follow the application prompts. While the online application process is by the far the more convenient option, it does come with basic requirements.

Apply for an Employer Identification Number (EIN) online

Just as individual U.S. citizens have unique social security numbers to identify themselves, U.S. businesses are issued employer identification numbers, commonly referred to as EINs. EINs are unique, nine-digit numbers issued by the Internal Revenue Service (IRS) and primarily used to report employment taxes. Like social security numbers, they never expire and are never reissued to another business. A social security number (SSN) is a nine-digit number assigned to US citizens and permanent residents. It is used by the US government to track your earnings, taxes, and employment, as well as eligibility for certain social benefits after retirement.

The same number set is never reissued to another business entity, even if it goes bankrupt and gets winded up. Each U.S. citizen is issued a unique Social Security number upon their birth. This number enables easy identification by government entities and also serves to distinguish one person from another.

Closing Your Employee Identification Number

Taxpayers who apply online can view, print, and save their EIN assignment notice at the end of the session. Authorized third party designees will receive the EIN; however, the EIN assignment notice will be mailed to the applicant. The online application isn’t available for entities with foreign addresses or for applications in which the responsible party is an entity with an EIN obtained through the Internet.

It is also required by many banks, financial institutions, credit card companies, and vendors. Make sure your organization is formed legally before you apply for an EIN. You may apply for an EIN online if your principal business is located in the United States or U.S. The person applying online must have a valid Taxpayer Identification Number (SSN, ITIN, EIN). The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.


As such, it may be a good idea to get one even if it isn’t required because it can offer several advantages. Your Employer Identification Number (EIN) is used as your business’s national identifier. Once you’ve received your business’s EIN, your number will be made available to the public.

  • Every corporation needs an EIN for taxes, even if you don’t have employees.
  • Self-employed individuals such as subcontractors are typically required to have an EIN, which will be used by the primary contractor to report to the IRS all business income paid to the subcontractor.
  • In addition, you must be a person that is authorized to receive the number on behalf of the business.
  • On the other hand, if you just prefer not to deal with the IRS, there are plenty of EIN services that can acquire an EIN for you for a one-time fee.
  • This gave the IRS a record of Subhash’s business and a means of identifying the store for tax purposes.
  • This should be mailed to the IRS, and you should include a federal tax return, proof of your identity, and your foreign status documents.

First, the IRS will typically email or send you a physical letter confirming your EIN application. You also can check business documents, such as tax returns, to find your EIN printed there. This is true even for corporations formed as holding companies without the intent to conduct business. Every American employer identification number definition corporation must file taxes with the IRS, and hence every American corporation must have an EIN. The EIN is also referred to as a Federal Employer Identification Number or Federal Identification Number. However, depending on the taxpayer, the EIN may or may not be the taxpayer identification number.

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