An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns to businesses for purposes like tax reporting. While individuals have Social Security numbers, businesses require EINs for essential operations like paying taxes.
Do You Need an EIN?
You may not need an EIN, depending on your business type. However, even sole small business owners often find EINs beneficial as EINs provide protection and privacy from identity theft dangers nowadays.
Applying for and Maintaining an EIN
Application Process and Usage
Once assigned an EIN, a business keeps that EIN even if closing temporarily. The IRS typically issues EINs immediately. An EIN can open business bank accounts.
When applying for a business bank account, you have to list your EIN. You will also need to include this number on a variety of other documents related to your business.
Deactivation and Reactivation
If determining an EIN is no longer needed after receiving, you can request the IRS close the account. You can still use the EIN later if necessary, as it will always belong to that business. The number simply becomes "inactive."
Cost and Restrictions
There is no cost to apply. An EIN cannot be reused. Even if never used for returns, the IRS cannot cancel an EIN.
Frequently Asked Questions
Active Status
- How do I know if my EIN number is still active?
If you’re curious about the status of your EIN, you can contact the IRS to confirm whether your EIN remains active.
Expiration
- Do EIN numbers expire if not used?
No, EINs do not expire. Once issued, an EIN becomes the permanent federal taxpayer identification number for that business.