When to Use EIN on Form W-9
You can use an EIN instead of an SSN on W-9. The EIN must be registered to the business or individual applying for credit and must match the correct legal entity.
EINs protect your privacy. Using your Social Security Number for business increases the risk of identity theft, tax, and liability problems. EINs are provided free of charge from the IRS. Companies use EINs instead of SSNs to protect the privacy of an owner’s personal information.
Banking with EIN
Banks like Chase, Wells Fargo, and Bank of America don’t require an SSN to open a bank account. They will, in most cases, require an ITIN instead. To open a business bank account, you’ll need an EIN—also called a FEIN or tax identification number.
You can use an employer identification number (EIN) instead of a social security number (SSN) on Form W-9, Request for Taxpayer Identification Number and Certification. While SSNs are issued to individuals for identification, EINs are provided to businesses and other entities. An EIN allows separating business and personal finances. However, EINs are public record, so it’s important to keep your EIN secure.
Credit Applications and EINs
Creditors or lenders may check the EIN or SSN on a credit application. Not all creditors accept EINs instead of SSNs, so check their requirements first.
EINs differ from individual taxpayer identification numbers (ITINs), which are for personal tax purposes, while EINs are for business taxes.
You can get an EIN without an SSN if you are a non-US resident. The IRS provides EINs free online instantly and are limited to one EIN per day.
Do not use your EIN instead of SSN for individual tax forms. Protect your privacy by using your EIN as your tax ID number for business activities instead of your SSN.
An EIN is valid for credit applications, but check with the creditor or lender if they accept EINs. Using an EIN can impact your credit history and score. EINs reduce potential damage to your credit rating if fraudsters access your information.
Learn how to leverage your EIN to establish credit and improve finances. Create a distinct identity for your business and establish dedicated credit accounts under the business name.
You may apply for an EIN online if your business is in the US and the applicant must have a valid Taxpayer ID Number.
Unless a disregarded entity, you must use an EIN when filing taxes separate from personal forms. EINs uniquely identify most business types.
You need an EIN when you have an employee or certain retirement plans. Get a new EIN when changing business type or ownership.
Sole Proprietors and EINs
Sole proprietors usually don’t need an EIN. They can use SSNs instead. However, a separate business bank account is recommended. Some banks like Chase, Wells Fargo and Bank of America allow opening accounts without SSNs, using ITINs instead.