An EIN is one of the first things a new business gets asked for, by banks, by state agencies, and by the IRS itself. It's free from the IRS and usually quick to get, but the rules about who actually needs one confuse a lot of first-time founders.
Here's what an EIN is, when your LLC is required to have one, and how to apply.
What is an EIN?
An Employer Identification Number (EIN) is a nine-digit number the IRS assigns to identify a business for federal tax purposes. It's formatted like 12-3456789. You'll also see it called a federal tax ID number or a Federal Employer Identification Number (FEIN).
Think of it as a Social Security number for your business. Despite the name, you don't need employees to get one, and plenty of businesses without employees have them.
A few things worth knowing:
- It's federal only. Your state may issue separate numbers for state payroll taxes, unemployment insurance, or sales tax. Our sales tax license guide covers one common example.
- It's permanent. An EIN doesn't expire, and the IRS doesn't reassign it to another business, even after yours closes.
- It's tied to a responsible party. Every application names an individual who ultimately controls the business and its money, typically an owner or officer.
Does a single-member LLC need an EIN?
Not always, from the IRS's point of view. By default, a single-member LLC is a "disregarded entity" for federal income tax, which means its income goes on the owner's personal return. If that LLC has no employees and no federal excise tax obligations, it generally doesn't need its own EIN for federal income tax purposes. The owner reports the business income under their own Social Security number or taxpayer ID.
The IRS does require a single-member LLC to have its own EIN if it:
- Has employees. A disregarded LLC is treated as a separate entity for employment tax purposes, so it needs its own number to run payroll.
- Has certain federal excise tax filing requirements.
- Elects to be taxed as a corporation or an S corporation. At that point it's no longer disregarded and files its own returns.
Does a multi-member LLC need an EIN?
Yes. An LLC with two or more members is taxed as a partnership by default. It must have an EIN to file its annual partnership return, Form 1065, and to issue Schedule K-1s to its members. If it elects to be taxed as a corporation or S-Corp instead, it needs an EIN for that, too.
Why most LLCs get an EIN anyway
Even when the IRS doesn't require one, an EIN is usually worth getting:
- Opening a business bank account. Banks generally ask for an EIN to open an account in an LLC's name, and keeping business money separate is one of the most important things you can do to protect your liability shield. See our guide to opening a business bank account.
- Applications and registrations. Lenders, wholesale suppliers, and state and local agencies often ask for a federal tax ID on their forms.
- Hiring later. If you plan to bring on employees, you'll need one before your first payroll.
- A future S-Corp election. A business taxed as an S-Corp must have its own EIN. If that's on your radar, see when to elect S-Corp status.
How to get an EIN
There are three ways to apply, and all of them are free when you go directly to the IRS.
Online, the fastest option
The IRS online EIN application is on IRS.gov and is available during set hours on weekdays. It has to be completed in one session, and if everything checks out you receive your EIN immediately, along with a confirmation notice you can download and save.
To apply online, the responsible party needs a valid Social Security number, Individual Taxpayer Identification Number (ITIN), or existing EIN.
By fax or mail with Form SS-4
You can also complete Form SS-4, Application for Employer Identification Number, and send it to the IRS. According to the IRS, fax applications are generally processed in about four business days, and mailed applications take about four weeks.
If the responsible party is outside the U.S.
Applicants without an SSN or ITIN can't use the online application. International applicants can apply by fax or mail using Form SS-4, and the IRS also offers a phone option for them.
What to have ready before you apply
- The LLC's exact legal name, as it appears on your approved formation documents
- The business's physical address and mailing address
- The responsible party's name and SSN, ITIN, or EIN
- The number of members
- The state and date of formation
- Your main business activity
- Whether you expect to have employees in the next 12 months
Wait until your state has approved the LLC before you apply. If you get an EIN under a name the state later rejects, you'll have a mismatch to clean up.
One more rule: the IRS issues only one EIN per responsible party per day.
EIN vs. SSN: which one goes where?
| Situation | Number typically used |
|---|---|
| Single-member LLC, no employees, default tax treatment | Owner's SSN (or the owner's own EIN) for federal income tax |
| Single-member LLC with employees | The LLC's EIN for payroll and employment taxes |
| Multi-member LLC | The LLC's EIN |
| LLC taxed as an S-Corp or C-Corp | The LLC's EIN |
| Business bank account for an LLC | Usually the LLC's EIN |
Watch out for paid look-alike sites
The IRS never charges for an EIN. Some websites are designed to look official and charge a fee for what is really just the free IRS application. The genuine application is on IRS.gov.
There's nothing wrong with paying a service to handle it, as long as you know what you're paying for. EZ Entity Setup offers an EIN as a $99 add-on, and it's included in the Advanced plan, which is $249 a year plus state fees. Plenty of founders apply on their own for free, and that works just as well. You can see what each plan includes on our pricing page.
Do you need a new EIN if your business changes?
Sometimes. Changing your business's name or address generally doesn't require a new EIN; you notify the IRS of the change instead. Bigger changes in ownership or structure, like taking on partners, incorporating, or buying an existing business, can require a new number. The IRS's "Do you need a new EIN?" guidance walks through each situation by business type.
If you lose track of your EIN, check the confirmation notice the IRS sent when it was issued, past tax returns, or your bank records. You can also call the IRS Business and Specialty Tax Line, where an authorized person can get the number after verifying their identity.
The short version
An EIN is a free, nine-digit federal tax ID the IRS issues to businesses. Multi-member LLCs need one. Single-member LLCs need one if they hire employees, have certain excise tax obligations, or elect to be taxed as a corporation or S-Corp.
Even when it's optional, most LLC owners get one because banks and other institutions expect it. Apply after your state approves your LLC, either on IRS.gov or with Form SS-4, and never pay a site that only pretends to be the IRS.
This article is general information, not legal or tax advice. For decisions about your situation, talk to an attorney or a tax professional.