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Understanding the Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax purposes. EINs are also sometimes referred to as Federal Tax Identification Numbers. Businesses use their EIN to file tax returns, open bank accounts, apply for business licenses, and conduct other financial transactions related to their business operations. EINs are required for most types of business entities, including corporations, partnerships, and sole proprietorships.
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| Understanding the Employer Identification Number (EIN): |
- EINs are free to obtain from the IRS. You can apply for an EIN online, by mail, by fax, or by phone. The process typically takes less than 15 minutes, and you'll receive your EIN immediately upon approval if you apply online.
- Non-profit organizations, government agencies, and certain other types of entities are also required to have an EIN.
- EINs are used to identify a business entity for tax purposes, but they do not determine whether a business is considered an independent contractor or an employee. This determination is based on other factors, such as the level of control the employer has over the worker's job duties and work environment.
- If you change your business name or structure, you may need to apply for a new EIN. For example, if you convert from a sole proprietorship to a partnership, you'll need a new EIN.
- If you lose your EIN or need to verify it for any reason, you can contact the IRS Business & Specialty Tax Line at 1-800-829-4933.
- EINs are confidential information and should be protected from unauthorized disclosure.
