What is an employer identification number (EIN)?

Alana Rudder

BLUEPRINT

Updated 1:53 p.m. UTC Oct. 24, 2023

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An employer identification number (EIN) is issued by the Internal Revenue Service (IRS) to identify a business for tax administration purposes. It’s also used to complete some core business tasks, such as hiring employees and opening a business bank account. LLCs, corporations, S corps and even sole proprietorships can benefit from obtaining an EIN.

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What is an EIN used for?

An EIN is also called an employer identification number or a federal employer identification number (FEIN). The IRS issues it for the purposes of tax administration. However, it is often needed to complete other core business tasks, including:

Opening an LLC bank account: To protect its limited liability status (and so its members’ personal assets), an LLC must be able to prove a separation between its members’ assets and the business’s. Opening a separate bank account for the LLC helps to prove this separation. An EIN is often required to complete this task.
Applying for business licenses and permits: Some states require businesses to obtain a general business license. Even for those that don’t, however, many professions require a business license before a relevant LLC can operate. For example, architectural, veterinarian, medical, legal and accounting practices must obtain permits to operate. An EIN is often required to apply for such licenses and permits.
Hiring employees: To hire and pay withholding taxes for an LLC employee, the business must obtain and provide an EIN for associated tax administration purposes.
Obtaining business funding: Many banks require an EIN to open business credit cards or apply for small business loans.

Do I need an EIN?

While almost all LLCs can benefit from having an EIN, not all are required to obtain one. The IRS specifies that LLCs involved in the following activities must obtain an EIN:

Have employees.
Operate as a partnership.
File certain tax returns (including employment, excise, alcohol, tobacco or firearms tax returns).
Withhold income taxes paid to a nonresident alien.
Be involved with trusts, IRAs, exempt organization business income tax returns, estates, real estate mortgage investment conduits, non-profit organizations, farmers’ cooperatives or plan administrators.
Have a Keogh plan (a retirement plan for self-employed individuals or unincorporated LLCs).

If you fall into this category of entrepreneurs, remember that obtaining an EIN is free and quick. And it affords many benefits, including:

Separating your business assets from your personal ones so your assets are better protected under your business’s limited liability status.
Allowing you to make key business decisions whenever you need to, such as hiring employees or applying for business funding.
Reducing the number of times you have to supply personally-identifying information, such as your Social Security number, thereby protecting yourself from identity theft.
Allowing your business to obtain key licenses to provide your services or product offerings.

However, LLCs or sole proprietorships run by one owner often do not obtain an EIN if they are not interested in enforcing the limited liability protection available by separating their personal and business finances. These entrepreneurs use their Social Security numbers to file income tax returns and pay quarterly estimated taxes.

How do I get an EIN?

To obtain an EIN, visit the IRS website. You can complete the EIN application between 7 a.m. and 10 p.m. ET. The application is free and takes about 15 minutes to complete. However, it is important to note that you must complete the form in one sitting. There’s no option to save the form and finish it later.

To complete the form, you must supply the following information:

Your Social Security number.
Your business’s name and contact information.
Your business’s structure (LLC, for example) and purpose.
General information about any employees you’ve hired (such as number of employees and wages paid).
Your business’s formation date.
The types of products and services your business sells.

Once you submit the form, you should instantly receive your EIN on a confirmation page. It’s important to print and keep this confirmation page with your other core business documents, such as your articles of organization or certificate of formation.

EIN vs. TIN and other tax ID numbers

EMPLOYER IDENTIFICATION NUMBER (EIN)	FEDERAL EMPLOYER IDENTIFICATION NUMBER (EIN)	SOCIAL SECURITY NUMBER (SSN)	STATE TAX ID NUMBER	TAXPAYER ID NUMBER (TIN)
An employer identification number (EIN) is issued by the IRS and identifies a business for tax purposes. It is also used for core business purposes, such as applying for licenses or opening a business bank account	A federal employer identification number is an elongated name for an employer identification number or EIN	A Social Security number is issued by the IRS and identifies a person for tax administrative purposes. It is also used for other purposes, such as obtaining medical care, opening a personal bank account and applying for EINs	A state tax ID number identifies a business before a particular state — usually the state in which the business was formed and operates — for tax administration purposes, such as paying sales tax. It is also used to obtain state-specific business licenses	A taxpayer ID number identifies a person or an individual before the federal government for tax administration purposes. Examples of a TIN number include EINs and Social Security numbers

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Frequently asked questions (FAQs)

An EIN is issued by the Internal Revenue Service (IRS) to identify a business for tax administrative purposes. A taxpayer identification number (TIN) is a number issued by the IRS that identifies a business or individual for tax-related purposes. Two types of TINs are EINs and Social Security numbers. A tax ID number is issued by states and assigned to businesses that form or operate within the state for tax administrative purposes.

No, an employer identification number (EIN) is issued by the IRS to identify a business for tax administrative purposes. In contrast, a Social Security number (SSN) is issued by the IRS to identify a person for tax administration purposes. Both can be used for other purposes, too. For example, while an EIN is often required to open a business bank account, a SSN is often required to open a personal bank account.

There are several ways you can retrieve a lost EIN. For example, if you’ve used the EIN to open a bank account, you can call the bank to request your EIN. Likewise, if you used it to obtain a business license, you can call the issuing agency to request your EIN.

Or, you can call the IRS’s business and specialty tax line between 7 a.m. and 7 p.m. local time, Monday through Friday, to request your EIN. If you do, you will need to provide identifying information to prove you are authorized to obtain it. You can find the number on the IRS’s website.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

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Alana Rudder

BLUEPRINT

Alana is the deputy editor for USA Today Blueprint's small business team. She has served as a technology and marketing SME for countless businesses, from startups to leading tech firms — including Adobe and Workfusion. She has zealously shared her expertise with small businesses — including via Forbes Advisor and Fit Small Business — to help them compete for market share. She covers technologies pertaining to payroll and payment processing, online security, customer relationship management, accounting, human resources, marketing, project management, resource planning, customer data management and how small businesses can use process automation, AI and ML to more easily meet their goals. Alana has an MBA from Excelsior University.

Bryce Colburn

BLUEPRINT

Bryce Colburn is a USA TODAY Blueprint small business editor with a history of helping startups and small firms nationwide grow their business. He has worked as a freelance writer, digital marketing professional and business-to-business (B2B) editor at U.S. News and World Report, gaining a strong understanding of the challenges businesses face. Bryce is enthusiastic about helping businesses make the best decisions for their company and specializes in reviewing business software and services. His expertise includes topics such as credit card processing companies, payroll software, company formation services and virtual private networks (VPNs).