How to Get an EIN: A Step-by-Step Guide for Your Business

Starting a business in the United States often involves navigating a range of administrative tasks. One crucial step for many businesses is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Think of it as a Social Security number for your business. This unique nine-digit number is essential for various business operations, from opening a business bank account to hiring employees. The good news is, getting an EIN is a straightforward process, and you can even do it online for free directly through the IRS. This guide will walk you through everything you need to know about How To Get An Ein quickly and efficiently.

Applying for an EIN Online: The Fast and Free Method

The IRS provides a convenient and free online tool to apply for and receive your EIN instantly. This is often the quickest method, allowing you to get your EIN in just minutes. Here’s how it works and what you need to be aware of:

Using the IRS Online EIN Application Tool

The IRS’s EIN Assistant is a user-friendly online tool designed to guide you through the application process. You can access this tool directly on the IRS website.

Key Features of the Online Application

Single Session Application: The online application is designed to be completed in one session. You cannot save your progress and return later. Ensure you have all the necessary information ready before you begin.
Time Limit: The application will expire after 15 minutes of inactivity. If this happens, you will need to restart the process.
Immediate Issuance: Upon successful submission and approval, your EIN is issued immediately online.
Print Confirmation: It’s crucial to print your EIN confirmation letter (Form CP 575, Notice of Employer Identification Number) for your records as proof of your EIN.

Who is Eligible to Apply Online for an EIN?

The IRS online EIN application tool is available to specific types of applicants. Here’s a breakdown of eligibility:

Eligibility Requirements for Online EIN Application

You can use the online tool if you meet the following criteria:

Principal Business Location: Your principal place of business must be located in the United States or U.S. territories.
Responsible Party: You must be the “responsible party” of the entity. This is generally the person who ultimately controls, manages, or directs the entity and the disposition of its funds and assets. You can also be an authorized representative applying on behalf of the responsible party, provided you have the necessary authorization (e.g., Power of Attorney).
Taxpayer Identification Number: You must have a valid Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN). This number belongs to the responsible party.

Situations Where You Cannot Apply Online

You cannot use the online tool if:

Business Location Outside the U.S.: If your principal place of business is located outside of the United States or U.S. territories, you are not eligible to apply online.
Applying with an Existing EIN: Government entities are the only entities permitted to apply for an EIN using an existing EIN.

If you are ineligible to apply online due to these reasons, you will need to use alternative application methods, such as phone, fax, or mail, which are detailed later in this guide.

Gather Your Necessary Information Before You Apply

Before you start the online EIN application, make sure you have all the necessary information readily available. This will ensure a smooth and quick application process.

Information Needed for Your EIN Application

You will typically need to provide the following information:

Legal Name of Your Business: This is the official name of your corporation, LLC, partnership, or other entity.
Trade Name (DBA) if Applicable: If your business operates under a “doing business as” (DBA) name that is different from your legal name, you’ll need to provide this.
Business Address: You will need to provide the physical address of your business.
Mailing Address: If your mailing address is different from your business address, you’ll need to provide this as well.
Type of Legal Entity: You will need to specify the legal structure of your business (e.g., sole proprietorship, partnership, corporation, LLC).
Reason for Applying for an EIN: You’ll be asked to state the primary reason you are applying for an EIN (e.g., starting a new business, hiring employees, opening a bank account).
Responsible Party Information: Details about the responsible party, including name, SSN or ITIN, and contact information.
Principal Business Activity: A brief description of the primary business activity.
Starting Date of Business: The date your business started or will start.
Accounting Year End: The month your accounting year ends.
Number of Employees (if applicable): If you anticipate hiring employees in the next 12 months, you may be asked to provide an estimate.
Industry Code (NAICS): While not always mandatory in the online application, knowing your North American Industry Classification System (NAICS) code can be helpful. You can search for this code on the Census Bureau website if needed.

Having this information prepared beforehand will make the online application process significantly faster and easier.

Step-by-Step Guide: How to Apply for an EIN Online

Ready to get your EIN online? Here’s a step-by-step guide to navigate the IRS online EIN application:

Access the IRS EIN Application

Go to the IRS Website: Navigate to the official IRS website, www.irs.gov.
Search for “EIN”: Use the search bar on the IRS website and type in “EIN” or “Apply for an EIN”.
Locate the Online EIN Assistant: Look for links that direct you to the “Online EIN Application” or “EIN Assistant”. The IRS often uses clear calls to action like “Apply Online Now” or “Get an EIN Online”.
Click the Link: Click on the appropriate link to access the IRS Online EIN Assistant tool.

Complete the Online Form

Begin Application: Once you are on the EIN Assistant page, you will typically see a button to “Begin Application” or “Start Here”. Click this to start the process.
Answer Questions: The online tool will guide you through a series of questions about your business. Answer each question accurately and carefully, using the information you gathered in the preparation stage.
Review Your Information: Before submitting, carefully review all the information you have entered to ensure accuracy. Mistakes can cause delays or complications.
Submit Application: Once you are confident that all information is correct, submit your application electronically.

Receive Your EIN Instantly

Confirmation Screen: If your application is successful, you will receive a confirmation screen displaying your EIN immediately.
Print CP 575: Crucially, print out the confirmation, which is officially known as Form CP 575, Notice of Employer Identification Number. This is your official record of your EIN. The IRS does not mail out EIN confirmation letters for online applications.
Save Electronically (Optional): Consider saving a digital copy of your EIN confirmation for your electronic records as well.

Understanding When You Need an EIN

Not all businesses are required to obtain an EIN. However, many business structures and situations necessitate having one. Knowing when you need an EIN is important for compliance.

Common Scenarios Requiring an EIN

Generally, you will need to get an EIN if your business:

Hires Employees: If you plan to hire employees, you will need an EIN to report payroll taxes.
Operates as a Corporation or Partnership: Corporations and partnerships, by their legal structure, typically require an EIN.
Operates as a Limited Liability Company (LLC) and is Taxed as a Corporation or Partnership: While single-member LLCs taxed as sole proprietorships may not always need an EIN, LLCs taxed as corporations or partnerships do. It’s often recommended for LLCs to get an EIN for liability protection and business banking purposes regardless of tax classification.
Pays Excise Taxes: If your business is required to pay excise taxes on certain goods or services.
Operates a Multi-Member LLC: Multi-member LLCs are generally classified as partnerships for tax purposes and require an EIN.
Administers Certain Types of Trusts, Retirement Plans, or Estates: If you are responsible for these types of entities, an EIN is usually required.
Changes Business Structure or Ownership: In certain cases of business restructuring or ownership changes, a new EIN might be necessary.
Opens a Business Bank Account: Most banks require an EIN to open a business bank account.

It is always best to check with legal and financial professionals to determine if your specific business situation requires an EIN.

Alternative Methods to Apply for an EIN

While the online method is the fastest, the IRS provides alternative ways to apply for an EIN if you are not eligible for online application or prefer other methods. These include applying by phone, fax, or mail. Details and instructions for these methods can be found on the IRS website by searching for “How to Apply for an EIN” and looking for the “Other Ways to Apply” section. Keep in mind that these methods generally take longer to process than the online application.

Important Update: Beneficial Ownership Information Reporting to FinCEN

Starting January 1, 2024, many companies, including corporations, LLCs, and similar entities created or registered to do business in the United States, are required to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). Beneficial owners are individuals who ultimately own or control the company.

This is a separate reporting requirement from obtaining an EIN and is enforced by FinCEN, not the IRS. It’s crucial to understand if your company is required to report beneficial ownership information. For detailed information, including who is considered a beneficial owner and reporting deadlines, please visit the FinCEN website at www.fincen.gov. The IRS cannot answer questions related to FinCEN’s beneficial ownership information reporting requirements. Contact FinCEN directly for any queries related to this new regulation.

Getting an EIN is a fundamental step for many businesses operating in the U.S. By utilizing the IRS’s free online tool and following this guide, you can efficiently obtain your EIN and ensure your business is set up for success. Remember to always refer to the official IRS website for the most up-to-date information and guidance.