An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns to business entities for tax purposes. EINs are not transferable between business entities or owners.
Obtaining an EIN
To obtain an EIN, apply online at irs.gov.
- Sole proprietors may use their Social Security number instead of an EIN.
- However, obtaining an EIN can protect personal information.
- Most business structures need EINs to open business bank accounts.
EIN Validity and Updates
EINs do not expire. If ownership or structure changes, businesses usually need new EINs.
- For instance, an LLC filing as a sole proprietorship would need a new EIN if it incorporated or took on partners.
- Sole proprietors in California who plan to hire employees will be required to have an EIN for tax withholding purposes.
- There is no charge to get an EIN, and you can register for it online.
If you have a sole proprietorship or partnership using your Social Security number for taxation, you must notify tax authorities, banks, and creditors if you later register for an EIN. Each entity must have a distinctive EIN.
When Business Changes Occur
As a general rule, an EIN cannot transfer when a business changes structure or ownership. However, if the business merely changes its name or location, it may retain the EIN after notifying authorities. A sole proprietor can use an existing EIN under these circumstances.
FAQs on EIN Usage
Can a single member LLC use the owner’s Social Security number instead of getting an EIN?
Yes, they have that option. However if the LLC has employees or needs to file certain tax returns, it needs a separate EIN. So while single member LLCs can use a Social Security number, employing LLCs need EINs.
Do I need a different EIN for each LLC?
Each entity must have a distinctive EIN. If ownership or structure changes, businesses usually need new EINs.