EIN Application Guide: When Your Business Needs an Employer Identification Number
An Employer Identification Number (EIN) is a 9-digit number assigned by the IRS to identify a business entity for tax purposes. It functions like a Social Security Number for businesses. The EIN is free to obtain and the application takes approximately 5 minutes online.
When an EIN is REQUIRED:
- The business has employees (or will hire employees)
- The business is a corporation, partnership, or multi-member LLC
- The business files excise tax returns (Form 720)
- The business withholds taxes on non-wage income paid to a non-resident alien
- The business has a Keogh plan
- The business is involved with trusts, estates, non-profit organizations, or farmer cooperatives
When an EIN isn’t technically required (but recommended):
- Sole proprietor with no employees: the owner can use their SSN for tax filings. However, an EIN is strongly recommended because: (1) it protects the SSN from being shared on W-9 forms sent to clients, (2) most banks require an EIN to open a business account, and (3) vendors and clients increasingly require an EIN for 1099 reporting.
- Single-member LLC with no employees: same as sole proprietor (the LLC is a disregarded entity for federal tax purposes).
How to apply:
- Online: IRS.gov/businesses (available Monday-Friday, 7am-10pm Eastern). Immediate EIN assignment.
- By mail/fax: Form SS-4. Processing time: 4 weeks (mail) or 4 days (fax).
- Cost: Free. Any service charging for an EIN application is adding a markup for filing a free form.
What triggers the need for a NEW EIN?
An existing business needs a new EIN when: (1) it changes entity type (sole proprietor to LLC, LLC to corporation, corporation to S-Corp doesn’t require a new EIN since S-Corp is a tax election, not an entity change), (2) it is a partnership that incorporates, (3) an existing business owner dies and the estate operates the business, or (4) the business buys or inherits an existing business.
An S-Corp election (Form 2553) doesn’t require a new EIN. The existing LLC or corporation’s EIN continues.
Can I apply for an EIN online if I’m a foreign owner?
No. The IRS online EIN application requires a valid U.S. Taxpayer Identification Number (SSN or ITIN) for the “responsible party.” Foreign owners without an SSN or ITIN must apply by mail or fax using Form SS-4. Processing time is 4 business days by fax or 4-6 weeks by mail. A common workaround: if the LLC or corporation has a U.S.-based member or officer with an SSN, that person can apply online as the responsible party. Foreign-owned single-member LLCs also need an EIN for Form 5472 reporting (even if they have no employees and no income), because the IRS requires an annual information return for any LLC with a foreign owner.
What should I do if I lose my EIN confirmation letter?
The IRS issues EIN confirmation on CP 575, which arrives by mail within 4-6 weeks of approval (online applications receive the EIN immediately on screen, with CP 575 following by mail). If you lose the letter, you can call the IRS Business & Specialty Tax Line at (800) 829-4933 (Monday through Friday, 7am to 7pm local time) to verify your EIN. Only authorized individuals listed on the application (the responsible party or an authorized representative with a valid power of attorney on file) can request EIN verification. You can also find your EIN on previously filed tax returns, bank account applications, or state filings that required it. The IRS does not issue duplicate CP 575 letters, but you can request a 147C letter as official confirmation of your EIN assignment.
How do I choose the right tax professional for my business?
Look for a CPA or EA (Enrolled Agent) with specific experience in your industry and business structure. General tax preparers who primarily handle W-2 returns may miss business-specific deductions and planning opportunities. Ask about their experience with your entity type (S-Corp, partnership, sole proprietorship) and whether they handle estimated tax calculations, payroll tax compliance, and state filing requirements. A proactive tax advisor will schedule a mid-year planning session to project your annual liability and recommend adjustments, not just file your return after the year ends. Fee structures vary: hourly rates, flat fees per return, or monthly retainers. For businesses with multiple entities, multi-state obligations, or complex transactions, a monthly retainer with a dedicated advisor often provides the best value.
Can I use my Social Security number instead of an EIN for my business?
Sole proprietors with no employees can legally use their SSN on Schedule C and when receiving 1099s. However, getting an EIN is free, takes five minutes on the IRS website, and offers significant advantages. An EIN protects your SSN from being shared with every client who needs to issue you a 1099. Banks require an EIN to open a business bank account, and many clients and payment platforms prefer or require it. If you ever hire an employee, establish a retirement plan, or form an LLC or corporation, an EIN becomes mandatory. You can apply online at IRS.gov during business hours (Monday-Friday, 7am-10pm Eastern) and receive your EIN immediately. The application is Form SS-4, and there is no fee.
Related guides:
- Offer in Compromise: The Honest Assessment
- IRS Installment Agreement: Which Type to Pick
- IRS Bank Levy: What to Do in the First 21 Days
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Yarik Yarosh, CPA. "EIN Application Guide: When Your Business Needs an Employer Identification Number." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/small-business-ein-application-when-needed
This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.