What a Business Tax ID Number Is and Why You Need One

A Business Tax ID Is Your Company's Identification Number for the IRS

A Business Tax ID Number, officially called an Employer Identification Number (EIN), is a nine-digit code the Internal Revenue Service (IRS) assigns to your business. It works like a Social Security number, but for your company instead of a person. The IRS uses it to track your business taxes, payroll, and other filings.

You need an EIN if you have employees, operate as a corporation or partnership, or file certain tax forms. Even if you are a sole proprietor with no employees, you may need one depending on your business structure and whether you have a business bank account. The number stays with your business for its entire life, even if you change owners or locations.

Getting an EIN is free and takes minutes if you apply online through the IRS website. You do not need a lawyer, accountant, or paid service to obtain one — the IRS handles it directly.

Key Takeaways

An EIN is a nine-digit number assigned by the IRS to identify your business for tax purposes, similar to how a Social Security number identifies a person.
You must have an EIN if you have employees, operate as a corporation or partnership, or file certain business tax forms.
You can obtain an EIN free and instantly online through the IRS website using Form SS-4, or by mail, fax, or phone if you prefer.
Once assigned, your EIN remains the same throughout your business's life, even if you change ownership, location, or business structure.
You will need your EIN to open a business bank account, hire employees, file taxes, and apply for business licenses and permits.

Who Needs an EIN

The IRS requires an EIN for most business structures. If you operate as a corporation or partnership, you must have one. If you operate as a sole proprietor but have employees, you must have one. If you operate as a sole proprietor with no employees, you may still need one if you file certain tax forms, such as Form 1040-C (Schedule C) for self-employment income, or if you want to open a business bank account separate from your personal account.

Some businesses are exempt. If you are a sole proprietor with no employees and no separate business bank account, you can use your personal Social Security number on tax forms instead of an EIN. However, most business owners find it simpler and safer to obtain an EIN anyway, because it keeps personal and business finances separate and protects your Social Security number from being shared with vendors and clients.

Nonprofits, trusts, and certain other entities also need an EIN. If you are unsure whether your business needs one, the IRS website has a tool that walks through your situation.

How to Get an EIN Online, by Mail, or by Phone

The fastest way to get an EIN is online through the IRS website at irs.gov. You fill out Form SS-4 electronically, answer questions about your business (name, address, type of business, number of employees), and receive your EIN immediately on screen. You can print it or save it. The entire process takes about 15 minutes and costs nothing.

If you prefer not to apply online, you can mail Form SS-4 to the IRS address listed on the form. Processing takes about four weeks. You can also fax the form to the IRS fax number on the form, which usually takes two weeks. If you need an EIN urgently and cannot apply online, you can call the IRS Business and Specialty Tax Line at 1-800-829-4933 during business hours. A representative will assign you an EIN over the phone and mail you a confirmation letter.

You will need basic information about your business to complete the form: your legal business name, the address where you operate, the type of business you run, the date you started, and how many employees you have (or will have). If you are applying on behalf of someone else's business, you will also need their name and title.

What Information You Need to Provide

When you apply for an EIN, the IRS asks for details about your business structure and operations. You will need to tell them whether you are a sole proprietor, partnership, corporation, LLC, or another type of entity. You will also need to describe what your business does — for example, "retail clothing store" or "plumbing contractor" — so the IRS can classify it correctly for tax purposes.

You will provide your business address and, if different, the address where you actually conduct business. You will state the date your business began operations. You will report how many employees you currently have or expect to have in the next 12 months. If your business is a continuation of a previous business under a new name or ownership, you will provide details about the prior business.

You do not need to have a business license, lease, or bank account yet to apply for an EIN. The IRS assigns the number based on the information you provide. However, you will need your EIN before you can open a business bank account or hire employees.

What Your EIN Is Used For

Your EIN appears on every tax return your business files with the IRS. If you have employees, you use it to file payroll tax forms and report wages to the Social Security Administration. If you operate as a corporation, you use it to file a corporate income tax return. If you operate as a partnership or LLC, you use it to file the appropriate business return.

Banks require your EIN to open a business checking or savings account. Vendors, clients, and contractors may ask for it on invoices or contracts. State and local tax agencies use it to track business licenses and permits. If you hire employees, you provide it to them so they can report it on their personal tax returns. Credit card processors and payment platforms use it to report your business income to the IRS.

Your EIN is also used for other government purposes beyond taxes. Some states require it to register a business name or obtain a professional license. Certain loan programs and grants ask for it. If you apply for a business line of credit, lenders will use it to check your business credit history.

How Long an EIN Lasts and What Happens If You Lose It

Once the IRS assigns an EIN, it belongs to your business permanently. If you change your business name, move to a new location, or change your business structure, you keep the same EIN. You do not need to reapply or notify the IRS of routine changes. The only time you need a new EIN is if your business closes and you later start a completely new business, or if your business is purchased by new owners who operate it as a separate entity.

If you lose your EIN or forget it, you can look it up on the IRS website or call the IRS Business and Specialty Tax Line. You will need to provide your business name and address. The IRS can tell you your number over the phone. You can also check any tax documents or bank statements from your business — your EIN should appear on them.

If your business closes, you do not need to "cancel" your EIN. However, you should file a final tax return and notify the IRS that your business is no longer operating. The IRS will mark the EIN as inactive in their system.

EIN vs. Social Security Number: When to Use Each

If you are a sole proprietor with no employees and no separate business bank account, you can use your personal Social Security number on your tax return instead of an EIN. However, most business owners obtain an EIN anyway for privacy and organization reasons. Using an EIN keeps your Social Security number off vendor invoices, client contracts, and other business documents.

If you have employees, you must use an EIN — you cannot use your Social Security number for payroll purposes. If you operate as a corporation, partnership, or LLC, you must use an EIN. If you have a business bank account, the bank will ask for an EIN (or your Social Security number if you are a sole proprietor without one).

The key difference: a Social Security number identifies you as a person, while an EIN identifies your business as a separate entity. Using an EIN signals to the IRS and other agencies that you are operating a formal business, which can affect how your taxes are filed and what deductions you can claim.

Frequently Asked Questions

How long does it take to get an EIN?

Online applications receive an EIN immediately. Mail applications take about four weeks. Fax applications usually take two weeks. Phone applications are processed during the call, and you receive a confirmation letter by mail within two weeks.

Do I need an EIN if I am a sole proprietor with no employees?

Not required, but recommended. You can use your Social Security number instead, but an EIN keeps your personal information separate from your business and is required if you have a business bank account or plan to hire employees later.

Can I change my EIN if I do not like the number I was assigned?

No. The IRS does not reassign EINs based on preference. Your EIN stays the same for the life of your business. You only receive a new EIN if your business closes and you start a completely new business.

What if I applied for an EIN but never used it?

An unused EIN remains valid. You can use it at any time in the future. There is no expiration date or penalty for not using it immediately after assignment.

Can someone else apply for an EIN on behalf of my business?

Yes. A representative, accountant, attorney, or family member can apply for you. You will need to provide them with your business information and authorize them to apply. The IRS will mail the confirmation letter to the address you specify on the form.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.