EIN (Employer Identification Number)

An EIN is a tax ID number for businesses, issued by the IRS. Who needs one, how to get one for free, and where it goes on invoices and tax forms.

Who needs an EIN

The IRS requires an EIN if any of these apply:

  • Your business has employees
  • Your business is structured as a partnership, LLC (multi-member), C-corp, or S-corp
  • You file employment, excise, or alcohol/tobacco tax returns
  • You have a Keogh plan (retirement plan for self-employed)
  • You operate as a non-profit
  • You are a fiduciary for an estate, trust, or similar entity

Sole proprietors with no employees are not required to have an EIN. They can use their Social Security Number on tax forms and W-9s. But most experienced sole proprietors get an EIN anyway for two reasons:

  1. Privacy. Every W-9 you send a client has your Tax ID on it. If you use your SSN, your SSN is in every client's accounts payable system, which is a security risk.
  2. Banks usually want one. Most banks require an EIN to open a business bank account, even for a sole proprietor. Mixing personal and business banking is the fastest way to lose the legal separation between you and your business.

How to get an EIN

The IRS issues EINs for free at IRS.gov. The application takes 15 minutes and you get the EIN immediately. Apply online at https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.

Requirements to apply online:

  • The application has to be completed in one session (no save and resume)
  • The applicant must have a valid Social Security Number, ITIN, or existing EIN to identify themselves as the "responsible party"
  • The business must be located in the US or US territories

You only need to apply once per business. The IRS does not reissue a lost EIN, but they can confirm yours by phone (call the IRS Business and Specialty Tax Line at 800-829-4933).

Beware of paid EIN services that charge $50 to $300 to get you a number that takes 15 minutes and is free directly from the IRS. The IRS does not charge for an EIN.

Where the EIN goes

On every document where you identify your business to the IRS or to other businesses:

  • Form W-9. Goes in the Taxpayer Identification Number box. This is the form clients ask you to fill out before paying you.
  • Form 1099-NEC. When you issue a 1099 to a contractor, your EIN is the payer's TIN.
  • Form W-2. Your EIN is the employer's identification number.
  • Tax returns. Form 1120 (corporate), 1065 (partnership), 941 (quarterly payroll), all reference the EIN.
  • State tax filings. Most states also use the federal EIN, sometimes alongside a state-issued ID.
  • Business bank account. Banks ask for the EIN when you open the account.

The EIN does NOT go on invoices unless your client specifically asks for it. Some large corporate clients ask vendors to include a tax ID on invoices for their AP system. For most B2B work, your EIN belongs on the W-9, not the invoice.

EIN vs SSN vs ITIN

Three different tax identification numbers issued in the US:

  • SSN (Social Security Number) is for individuals. Used on personal tax returns.
  • EIN is for businesses. Used on business tax returns.
  • ITIN (Individual Taxpayer Identification Number) is for individuals who do not qualify for an SSN (some non-residents and undocumented workers who pay taxes). Used in place of an SSN on personal tax returns.

A sole proprietor with no EIN uses their SSN on business tax forms. As soon as they form an LLC or hire an employee, they need an EIN.

Common questions

Is an EIN the same as a tax ID number?

EIN is one type of tax ID number. The IRS issues several: EINs for businesses, SSNs for individuals, and ITINs for individuals who do not qualify for an SSN. When a form says "Tax ID number" or "Federal Tax ID", they want whichever number identifies you to the IRS. For a business, that is the EIN. For a sole proprietor without an EIN, that is the SSN.

How much does an EIN cost?

Free. The IRS issues EINs at no cost, online at IRS.gov, in about 15 minutes. Any service charging for an EIN is a third party reselling something the IRS gives away. Apply directly through the IRS and you pay nothing.

Do I need an EIN as a sole proprietor?

Not legally, if you have no employees. You can use your Social Security Number for business taxes. But most sole proprietors get an EIN anyway because (1) banks usually require one to open a business account, (2) it keeps your SSN off every client's W-9, and (3) it makes the transition to an LLC easier later.

Can I look up a business EIN?

For public companies, yes. EINs appear on SEC filings, which are searchable on EDGAR. For private companies, no public lookup exists. If you need a vendor's EIN to issue a 1099, ask them to fill out a Form W-9 before you pay them. If they refuse, you are required to withhold 24% backup withholding from their payments.

Related terms and guides