What is an EIN?
An EIN (Employer Identification Number) is a unique nine-digit number the IRS uses to identify your business for tax reporting purposes. An EIN also helps you register a business entity, obtain a business loan, open a business bank account, and much more. It is required for many business activities, including filing taxes, and hiring employees.
Opening A Business Bank Account
Requirements Beyond EIN
Can I Open a Business Bank Account With Just an EIN? In general, no. An EIN is just one of several pieces of information you’ll likely need to provide. An employer identification number (EIN), or business tax ID, serves as a proof of your business’s identity and the nature of your business, which most banks will want to verify before allowing you to open a business bank account.
For Single-Member Entities
If you’re a single-person enterprise — such as a sole proprietor without employees or a single-member LLC — it is technically possible to open a business bank account without an EIN, depending on bank policies.
EIN Guidelines and Application
- You can apply for one EIN per business per day.
- You must form your business before applying, as you’ll need to provide the date of formation and its legal name.
- A sole proprietor may register for an EIN or use their SSN. However, if you hire employees or set up a retirement plan, an EIN will be necessary.
EIN for Foreign Entities
- There are no citizenship or residency requirements for forming an LLC in the U.S. or for getting an EIN.
- Non-citizens can get an EIN by mailing Form SS-4 if they don’t have an SSN or ITIN.
Applying for an EIN
- Apply online using the IRS’s website, which is the quickest and easiest method.
- If you have an SSN or an ITIN, the online application allows you to get an EIN instantly.
- If you do not have an SSN, you can still mail Form SS-4 to apply.
- Once approved, you will receive an EIN Confirmation Letter.
Reasons to Get an EIN
An EIN helps avoid identity theft and is used to confirm business identity for various legal and financial transactions.
When is an EIN Necessary?
You will know you need an EIN if you answer “yes” to any of the following:
- Do you have employees?
- Are you operating your business as a corporation or a partnership?
- Do you file employment, excise, or alcohol, tobacco, and firearms tax returns?
- Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Always check with a professional advisor to understand your specific situation and requirements.