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Do I Need an EIN for my LLC? (Plus Other Important FAQs)

The short answer: you might. An Employer Identification Number (EIN) is a nine-digit federal tax identification number (format 12-3456789) that the IRS uses to identify a business entity, the way a Social Security Number identifies a person. Some LLCs are legally required to have one; almost every LLC benefits from one. This guide explains when an EIN is required, why it helps even when it is not, what you need to apply, and what happens after you receive it.

What Is an EIN? Is It the Same as an LLC?

No — an EIN is not an LLC. An EIN is a tax identity that the IRS assigns to a business: sole proprietorships, LLCs, corporations, partnerships and nonprofits can all have one. An LLC is a legal entity created under your state's statutes that gives you limited-liability protection and, by default, pass-through taxation. You form the LLC with the state first, then obtain the EIN from the IRS. Most sole proprietorships and single-member LLCs with no employees are not strictly required to have an EIN, but as the next section shows, most still should.

New to LLCs? Read What is an LLC and how do I form one?

If I Have an LLC, Do I Need an EIN?

Your LLC must have an EIN if any of the following apply:

• You have, or are planning to hire, employees.
• You are operating a multi-member LLC.
• You are a single-member LLC and want to be taxed as an S-Corporation or a corporation.
• You pay employment, alcohol, excise, tobacco or firearms taxes.
• You have a Keogh (self-employed retirement) plan.
• You do business with trusts, nonprofit organizations, estates, real estate mortgage investment conduits, plan administrators or farmers' cooperatives.
• You took ownership of an existing LLC.
• You wish to restructure as a corporation.

Non-US owners of a US LLC also need an EIN to open a US bank account and to file the information returns (Form 5472 with a pro-forma 1120) that the IRS requires of foreign-owned single-member LLCs. If you are unsure whether your situation applies, check with the IRS or a tax professional — or ask our team, who handle these applications every day.

Benefits of Having an EIN

Even when the law does not require one, getting an EIN early saves time and money later. An EIN lets you:

• Create a clear distinction between your business and yourself
• Make it easier to secure startup funding
• Open a business bank account in your company's name
• Establish business credit separate from your personal credit
• Keep bookkeeping and business finances clean and easy to track
• Add a layer of security and privacy to your business
• Protect yourself from identity theft by keeping your SSN off business paperwork
• Build professional credibility with vendors and customers
• Speed up business licence and permit applications
• Claim tax deductions and credits for business expenses, salaries and wages

Is an EIN the Same as an SSN for an LLC?

No. A Social Security Number identifies an individual; an EIN identifies a business. Many owners think of the EIN as their company's Social Security Number — it does the same job on tax, banking and employment paperwork, but for the entity rather than the person.

Should I use an SSN or an EIN for taxes?

A sole proprietor or single-member LLC with no staff, no self-employed retirement plan and no excise taxes can legally file under the owner's SSN. Using an EIN instead gives you more privacy, because your SSN stays off public and third-party documents; a separate business tax history; and the flexibility to hire, apply for funding or change tax status without delay. For most owners the EIN is the better choice from day one.

What Do I Need to Get an EIN for My LLC?

The IRS application is Form SS-4. Whether you file it yourself or we file it for you, you will need:

1. Legal business name and official address — a DBA name and a virtual business address are acceptable.
2. Type of legal entity — LLC, and how it is taxed.
3. Start date — your formation date, or the date you intend to start doing business.
4. Responsible party's name and tax ID — an SSN for US owners; an ITIN for non-US owners who have one. Owners with neither can still apply by fax or mail.
5. Number of LLC members.
6. Reason for applying — starting a new business, hiring employees, banking purposes, or changing entity type.
7. Maximum number of employees expected in the next 12 months.
8. Whether employment taxes will be filed annually or quarterly (if you will have employees).

How to Apply for an EIN

There are four ways to apply: online, by fax, by mail, or through Incofile's filing service.

Timings are the IRS's own published estimates and can be longer in busy periods. The IRS never charges for an EIN — our fee of $70 is for preparing and filing the application for you and handling any IRS follow-up. Incofile is a private company and is not affiliated with the IRS.

What to Do After Getting an EIN

Your EIN is active as soon as the IRS issues it. Keep the confirmation notice (CP 575, or the letter the IRS sends for fax and mail applications) with your company records — banks and lenders ask for it. You can then open a business bank account, set up payment processors such as Stripe or PayPal, apply for funding, register for state taxes and hire employees, all in your company's name.

Will I Ever Need to Change My EIN?

You need a new EIN when the ownership or structure of the business changes. Examples:

• A sole proprietor incorporates or forms an LLC.
• A single-member LLC becomes a multi-member LLC or a corporation.
• An LLC elects to be taxed as a corporation and the IRS requires a new number for the new structure.
• New partners join a business that was a sole proprietorship.

You do not need a new EIN when you change your business name, move to a new address or open additional locations — you simply notify the IRS of the change.

Frequently Asked Questions