Starting a business comes with a long to-do list, and somewhere near the top – usually right when you try to open a bank account or sign a client contract – you will hit a wall asking for your EIN. If you are new to business administration, tax acronyms can feel overwhelming fast. Is an EIN the same as a Tax ID? Do you really need one if you run a solo business? And how do you actually get one without paying unnecessary third-party fees? The short answer: An EIN is essentially a Social Security Number for your company. Getting one is a major milestone, and for most businesses, it is the key that unlocks official operations. In this guide, we will break down everything you need to know about Employer Identification Numbers in simple terms. What they are, whether your business requires one, and how to get yours straight from the IRS for free.

At-a-Glance Summary: An Employer Identification Number (EIN) – also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (TIN) – is a unique 9-digit number assigned by the Internal Revenue Service (IRS) to identify business entities in the U.S. Formatted as XX-XXXXXXX, it is free to obtain, never expires, and is required for opening bank accounts, hiring staff, and filing business taxes.

What Is an Employer Identification Number (EIN)?

To understand why your business needs an EIN, it helps to look at how the government views your company. When you operate as an individual, the IRS tracks your income and taxes using your personal Social Security Number (SSN). But once you create a business entity, that business becomes a separate “legal person” in the eyes of the law. An Employer Identification Number (EIN) is simply the unique 9-digit tax ID that the IRS assigns to keep track of that separate business entity.

Formatted as XX-XXXXXXX (two digits, a hyphen, and seven digits), your EIN acts as your company’s official financial identity card. Beyond keeping the tax authorities happy, having an EIN creates a crucial boundary between your personal identity and your business operations – protecting your personal assets and keeping your Social Security Number private.

EIN Format and Alternative Names (FEIN, Tax ID)

When you start filling out business applications, bank forms, or vendor agreements, you might notice that different organizations ask for your tax number using different jargon. This confuses almost every new founder, but here is the trick: they are almost always asking for the exact same thing. Your EIN will always follow a standardized 9-digit format: XX-XXXXXXX (two numbers, a hyphen, and seven numbers). Depending on who printed the paperwork, you will frequently see an EIN referred to as:

• FEIN (Federal Employer Identification Number): The full, formal name used by federal agencies.
• Federal Tax Identification Number (TIN): A broader umbrella term used by accountants and banks.
• Business Tax ID: The common casual phrase used by vendors and software platforms.

Regardless of which of these labels appears on a form, you will enter your same IRS-issued 9-digit EIN.

What Is an EIN Used For? (Banking, Hiring, Business Credit, Tax Returns)

Think of your EIN as the key that unlocks official business operations. Without it, your company is essentially stuck operating as an extension of you personally. Once your number is issued, you will use it across nearly every operational milestone, including:

• Opening a Business Bank Account: Banks require an EIN to establish commercial checking or savings accounts. This keeps your personal and business finances completely separate. It ‘s a legal requirement if you want to maintain the liability protection of an LLC or Corporation.
• Hiring Employees and Setting Up Payroll: The second you bring on team members, your EIN is required to report payroll taxes to the IRS, issue annual W-2 forms, and pay state unemployment insurance.
• Applying for Business Licenses & Permits: State and local government offices use your tax ID to track operational permits, sales tax permits, and local business registration.
• Building Business Credit: Just as your SSN is tied to your personal credit score, your EIN tracks your company’s credit history with bureaus like Dun & Bradstreet. This allows you to secure business credit cards, loans, and vendor terms without risking your personal credit score.
• Protecting Your Personal Privacy: When working with clients or vendors, they will often ask you to complete a W-9 form before paying you. Using an EIN instead of your personal Social Security Number prevents your SSN from floating around in other companies’ filing cabinets.

Do You Need an EIN? (Requirements & Criteria)

One of the most common points of confusion for new business owners is deciding when they actually need to get an EIN. The short answer? It depends on how your business is structured and whether you plan to hire people. While the IRS explicitly requires certain types of entities to have an EIN from day one, other business types have a choice. To help you figure out where you stand, let us break down the official requirements. We will start with the scenarios where having an EIN is non-negotiable. For many businesses, obtaining an EIN is not optional. It is a strict federal requirement. The IRS requires you to get an EIN if your business meets any of the following criteria:

• You Have Employees: The moment you hire your first employee (even a part-time worker or family member), you must have an EIN to process payroll and pay employment taxes.
• You Operate as a Corporation or Partnership: Multi-member entities like General Partnerships, Limited Partnerships, C-Corporations, and S-Corporations are legally distinct from their owners and must have their own EIN.
• You Have a Keogh Plan: If you set up a specialized self-employed retirement plan (like a Keogh plan or certain qualified pension structures), the IRS requires a tax ID to track those tax-deferred funds.
• You File Specific Specialty Tax Returns: If your business pays Employment, Excise, or Alcohol, Tobacco, and Firearms (ATF) taxes, an EIN is required on those returns.
• You Withhold Taxes on Non-Resident Alien Income: If your business pays non-wage income to a non-U.S. resident and withholds taxes on those payments, you need an EIN to report it.
• You Administer Certain Trusts or Estates: Estates, trusts (except certain revocable grantor trusts), IRAs, and farmers’ cooperatives require an EIN for tax filing purposes.

Sole Proprietors & Single-Member LLCs: Do You Need One?

If you run a solo business, such as a freelance consulting practice, an e-commerce shop, or a single-member LLC with no employees, the IRS technically allows you to use your personal Social Security Number (SSN) for federal tax reporting. Because a single-member LLC is treated as a “disregarded entity” for tax purposes, your business income simply flows through to your personal tax return. However, running a solo business on your SSN is usually a bad idea. Here is why almost every expert recommends getting an EIN anyway:

• Identity Protection: Handing out your SSN on Form W-9s to every client or vendor you work with creates a massive identity theft risk. An EIN acts as a public-facing shield for your private SSN.
• Banking Barriers: Most banks will refuse to open a business bank account for an LLC without an EIN, even if you are the sole owner.
• Establishing Professional Credibility: Clients, vendors, and corporate partners prefer working with independent contractors who use an EIN. It signals that you are running a legitimate business rather than working informally.

EIN vs. SSN vs. ITIN: What’s the Difference?

When you look at a tax form in the United States, you will almost always see a box asking for a Taxpayer Identification Number (TIN). This is where many new business owners get stuck. The U.S. government uses several different 9-digit numbering systems to track taxes, and using the wrong one can delay your applications or mess up your tax filings. To keep things simple, think of these numbers based on who they belong to and what they are used for:

• SSN (Social Security Number): Issued to individual U.S. citizens and eligible residents by the Social Security Administration. It tracks your personal earnings, personal taxes, and government benefits.
• EIN (Employer Identification Number): Issued exclusively to businesses and entities by the IRS. It tracks business tax filings, employee payroll, and commercial banking activities.
• ITIN (Individual Taxpayer Identification Number): Issued by the IRS to foreign individuals, non-residents, or dependents who have U.S. tax filing obligations but are not eligible for a Social Security Number.

To help you see how they stack up at a glance, here is a quick breakdown:

How to Apply for an EIN (Step-by-Step)

Applying for an EIN is one of the easiest steps in launching a company. However, before you open an application, you need to make sure you have your paperwork organized. Making an error on your application can delay your filing by several weeks or lead to rejection by the IRS.

Eligibility & Prerequisites

To apply for an EIN, the IRS requires you to meet a few basic prerequisites:

1. Your Business Must Be Located in the U.S. or U.S. Territories: Your principal business office or legal residence must be in the United States to use the standard application process.
2. You Must Designate a “Responsible Party”: The IRS requires you to list a single, real individual who ultimately owns, controls, or exercises ultimate effective control over the business entity.
3. Valid Taxpayer ID for the Responsible Party: The Responsible Party must provide their personal Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), unless applying as an international founder without one.

Method 1: Apply Online via the IRS Portal (Fastest)

For most business owners living in the U.S., the online application is by far the best option.

• Best For: Applicants located in the U.S. with a valid SSN or ITIN.
• Cost: Free.
• Turnaround Time: Immediate (your official EIN letter generates as a downloadable PDF right away).

How it works:

1. Visit the official IRS.gov EIN Assistant portal during operating hours (Monday through Friday, 6:00 a.m. to 1:00 a.m. Eastern Time).
2. Answer a series of interview-style questions about your business structure, ownership, and reason for applying.
3. Enter the name and SSN/ITIN of your designated Responsible Party
4. Review your details and hit submit. Your official IRS Form CP 575 (EIN Confirmation Letter) will immediately display on screen for you to download and save.

Note: You must complete the online application in a single session. The system times out after 15 minutes of inactivity and cannot save your progress.

Method 2: Apply by Fax or Mail (Form SS-4)

If you cannot apply online, or if you prefer keeping paper records, you can apply using paper IRS Form SS-4.

• Applying by Fax: Complete Form SS-4, enter a return fax number on the form, and fax it to 855-641-6935. The IRS will fax your EIN confirmation back to you within 4 business days.
• Applying by Mail: Mail your completed Form SS-4 to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. Mail processing typically takes around 4 weeks.

Method 3: How Non-US Residents Can Get an EIN Without an SSN

If you are an international founder starting a U.S.-based business (like a Delaware LLC or Wyoming C-Corp) and do not live in the U.S. or have an SSN/ITIN, you can still obtain an EIN. Because the automated online system requires an SSN or ITIN, non-resident foreign nationals must apply using an alternative process:

1. Complete Form SS-4: On Line 7b (where it asks for an SSN/ITIN), write “Foreign” or “N/A”
2. Option A: Apply by Phone (Fastest for International Applicants): Call the IRS International EIN line at +1 (267) 941-1099 (Monday–Friday, 6:00 a.m. to 11:00 p.m. Eastern Time). An IRS agent will walk through your completed Form SS-4 over the phone and issue your EIN immediately.
   Option B: Apply by International Fax or Mail: Fax your completed Form SS-4 to +1 (304) 707-9471 or mail it to Internal Revenue Service, Attn: EIN International Operation, Cincinnati, OH 45999.

Method 4: Use a Professional Filing Service (Hands-Off & Time-Saving)

While applying directly with the IRS is 100% free, many business owners prefer to hand off the process to a professional business formation service. If you are forming an LLC or Corporation at the same time, or if you simply want to avoid IRS paperwork and hold times, using an incorporated agent or filing specialist like IncParadise or similar filing services can streamline the entire setup.

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How to Find or Recover a Lost EIN

Misplacing your EIN can be stressful, especially when you need it immediately for a tax filing, bank application, or contract. The good news? You never need to apply for a second EIN if you lose your original number. In fact, the IRS generally expects a business to keep the exact same tax ID throughout its entire operational lifetime. Before you spend time on hold with the government, try these quick self-service recovery methods to locate your lost number:

• Check Your Initial IRS Confirmation Notice (Form CP 575 or 147C): When the IRS first issues your tax ID, they provide a computer-generated confirmation letter. Search your physical filing cabinet or email records for “CP 575” or “Form 147C”.
• Review Previous Business Tax Filings: Your 9-digit EIN is listed at the top of almost every official tax document. Check your copy of previously filed corporate tax returns (like Form 1120 or Form 1065), 941 payroll filings, or state tax returns.
• Inspect Bank Statements and Credit Applications: Check your business checking account onboarding paperwork, commercial loan documents, or merchant processing agreements. Financial institutions always record your EIN during account setup.
• Review State Registrations and Local Permits: Look at your state business license applications, sales tax registrations, or annual report filings submitted to your Secretary of State. Most state agencies require your federal tax ID on file.
• Call the IRS Business & Specialty Tax Line: If you have checked your records and still cannot locate the number, call the IRS directly at 1-800-829-4933 (available Monday through Friday, 7:00 a.m. to 7:00 p.m. local time).
• Note: To protect your security, the IRS agent will only release the EIN over the phone to an authorized person – such as a sole proprietor, corporate officer, partnership partner, or estate executor.

How to Update, Change, or Cancel an EIN

As your company grows and evolves, its legal name, physical address, or ownership structure might change. A common misconception among business owners is that any administrative change requires getting a brand-new tax ID. In reality, the IRS prefers that a business maintains its original EIN whenever possible. Here is how to handle structural shifts and know when your business actually needs a fresh number versus a simple update.

When Do You Need a New EIN? (Ownership Changes & Restructuring)

Minor administrative updates, such as changing your company’s name, moving to a new office location, or opening a new branch, do not require a new EIN. You simply notify the IRS of the update when filing your annual tax return or via a business address/name change form. However, if your company undergoes a fundamental legal shift in ownership or tax structure, the IRS views it as a brand-new entity and will require you to apply for a new EIN. Scenarios where a NEW EIN is required:

• Changing Your Business Entity Type: Converting a sole proprietorship into a corporation or partnership.
• Buying or Inheriting an Existing Business: If you purchase another company’s assets or operations, you generally cannot inherit or reuse the previous owner’s EIN.
• Shifting LLC Ownership Structure: Changing an LLC from a Single-Member LLC (disregarded entity) to a Multi-Member LLC (partnership) – or vice versa.
• Corporate Mergers or Rechartering: When a merger results in a completely new corporate entity receiving a new charter.

Closing Your Business Account with the IRS

If you decide to shut down your business, sell off its assets, or never end up using an EIN you requested, you might naturally wonder how to “cancel” the number. The short answer? The IRS never completely deletes or cancels an assigned EIN. Because your tax ID is permanently tied to a federal entity for historical audit and tax tracking purposes, the number remains linked to that business indefinitely. However, you can formally ask the IRS to close your business tax account so no future tax filing obligations accrue.

Need Help Getting Your EIN?

While applying directly through the IRS portal is free, navigating IRS tax forms, avoiding common filing errors, or placing long international phone calls can quickly eat up your valuable time. According to IRS estimates, preparing and filing Form SS-4 manually takes roughly 94 minutes, and a single mistake on your application can delay your business setup by weeks. If you would rather skip the administrative headache and ensure your business tax setup is done right the first time, IncParadise is here to help. Since 2002, IncParadise has helped over 10,000 entrepreneurs, small business owners, and international founders launch their U.S. entities effortlessly.

How IncParadise Simplifies Your EIN Process:

• Save Hours of Time: Instead of deciphering IRS instructions, complete a simple, 2-minute form and let experts handle the filing paperwork for you.
• Avoid IRS Application Delays: Mistakes on Form SS-4 can reject your filing. IncParadise verifies every detail to ensure error-free processing.
• Seamless Service for Non-US Residents: If you are an international founder without a U.S. Social Security Number, getting an EIN requires contacting the IRS directly over the phone or by fax. IncParadise manages the entire international application process on your behalf.
• All-in-One Business Setup: Need an LLC or Corporation formed alongside your EIN? IncParadise combines your business formation, Registered Agent service, and Tax ID application into one streamlined dashboard.

Whether you are launching a brand-new startup, expanding an international company to the U.S., or simply value your time at more than the cost of a quick service fee, IncParadise takes the guesswork out of getting your tax ID.

Get Your EIN Fast with IncParadise →

Originally Published: May 2017 | Last Major Update: July 2026