Employer identification number (EIN) is federal tax identification numbers assigned by the Internal Revenue Service (IRS) to businesses in the United States. As the name implies, the employer identification number is used by the IRS to identify the fiscal accounts of certain businesses in much the same way as social security identification numbers.
The IRS does not automatically assign employer identification numbers to the employer. Instead, it is the responsibility of certain businesses to request. Update and complete their employer identification numbers consistent with IRS requirements.
Who needs an EIN?
An EIN is necessary for any type of company that hires employees. However, non-employers are also required to obtain one if they operate as a corporation or a partnership.
When do you need a Federal Employer Identification Number?
Generally, the IRS requires that you obtain a federal employer identification number if any of the following aspects apply to your business:
- You have employees;
- Your business is a partnership or a corporation;
- You are required to file tax refunds for employment, taxation, or alcohol, tobacco, and firearms;
- You withheld income taxes, other than wages, paid to a resident alien;
- You have a Keogh Retirement Plan;
Your business is involved in one of the following organizations: Trusts, IRAs, the business organization exempt from income tax refunds, assets, intermediation of real estate mortgage investments, non-profit organizations, peasant cooperatives or plan managers.
If you qualify for an employer identification number, it is important that you contact your state income department to determine if you need a state tax identification number.
How can you get an employer identification number?
There are several ways to request an employer identification number. Businesses can apply online, by mail, fax or phone.
Most businesses can obtain employer identification numbers almost instantly by requesting them online during the hours specified by the IRS. In order to request an employer identification number online, businesses must have their primary business seat in the United States or in a US Territory and the business owner must have an identification number as the taxpayer, such as a social security number. An online assistant will help you answer the questions in an application and you will get your employer identification number at the end of the application.
When will you need to change your employer identification number?
Most businesses need a new employer identification number when there is a change in the ownership of the business or the structure of the business. For example, a sole proprietor who becomes a partnership will need a new employer identification number. A business that is subject to a bankruptcy process will also need a new employer identification number. However, businesses that only change their name or location, without changing ownership or structure, generally do not need new employer identification numbers.
In the event that you close your business, the IRS will close your business account. Your federal employer identification number will never be reused and if you decide to reopen your business in the future you can use the same employer identification number. You must close your account in writing by mail or fax, in a letter that contains the reason for the closure and your signature.
Employer identification numbers have important tax suggestions for businesses and qualifying businesses should consult the IRS or a tax attorney for additional information.
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Did you lose your EIN?
If you have lost or lost your EIN, you can recover it in the following ways:
- Check the original notification issued by the IRS when you received your EIN or call the IRS business and special tax line at 800-829-4933.
- If you used it to open a bank account or obtain a license, contact these organizations that should be able to retrieve your number.
- Look for an old tax return. Your EIN should be in it.