Key Takeaways:

  • A California EIN, also known as a Federal Tax ID, is essential for businesses to file taxes, open bank accounts, and more.
  • The SEIN (State Employer Identification Number) is required for payroll and other state-specific purposes.
  • The EIN application process can be completed online through the IRS, with options for U.S. citizens and non-U.S. residents.
  • SEINs are managed by California's Employment Development Department (EDD) and are used for state payroll taxes.
  • EINs and SEINs help separate business identity from personal identity, which can protect against identity theft.
  • Not all businesses need an EIN, but it’s required for corporations, partnerships, and any businesses with payroll requirements.

What Is a California EIN?

A California EIN, or employer identification number, is issued by the IRS to different business entities. It is also known as a Federal Tax ID Number or Tax ID Number (TIN). It is the equivalent of a social security number for businesses. Though it is known as an employer identification number, you do not need to have employees in order to get an EIN.

Like a social security number, the EIN allows people to:

  • Open business checking, savings, or investment accounts
  • File taxes for the business
  • Complete payroll for employees
  • Obtain lines of credit and credit cards
  • Apply for applicable business licenses.

Note: Applying for an EIN is one of the last things to do when you are setting up a business entity. Wait until the LLC or other entity has been approved by the state before applying. If you apply for an EIN first, the LLC and EIN won't match up.

The EIN is nine digits just like an SSN. But the first seven digits come first and the last two are proceeded by a hyphen.

Like applying for an LLC, getting an EIN protects the business owner from risk resulting from using their SSN for the purposes of business paperwork.

Why an EIN Matters for Business Operations

An EIN serves multiple roles that go beyond tax filing. For businesses, especially those seeking to expand, an EIN is crucial for obtaining loans, applying for business licenses, and establishing business credit. Additionally, having a Federal Tax ID separates personal and business finances, a key factor in protecting against identity theft and ensuring smooth tax reporting. If a business changes structure, such as transitioning from a sole proprietorship to an LLC, a new EIN may be required by the IRS. This identification number supports legal and financial transparency and is a valuable step in legitimizing and organizing a business entity.

How do I Apply for An EIN?

Applying for an EIN is a federal task and not specific to any state. They are given out by the IRS. The IRS allows EINs to be applied for online, by mail, or by fax. Faxing takes four days to process while mail takes four weeks.

U.S. citizens need to use their SSN. Those who aren't U.S. citizens need to use an Individual Taxpayer Identification Number or ITIN. Apply for the ITIN first if you don't already have one.

On the IRS website, find the EIN application and click “Apply Online.” Follow the on-screen instructions. You'll need to enter your mailing address and name, and confirm your LLC or entity name.

How to Choose the Right Time to Apply for an EIN

Timing is critical when applying for an EIN. You should complete state-level registration for your business structure, such as filing for LLC or incorporation, before applying for an EIN. This sequence helps prevent discrepancies in business records. Also, if your business undergoes restructuring that requires a new EIN, such as a change in ownership or legal form, apply for the new EIN promptly to avoid tax issues.

How do I Find My Existing SEIN?

SEIN stands for State Identification Number and in California it is known as the California Identification Number. If you cannot find the number, it is usually located on correspondence related to the business. Ask the EDD if no correspondence is found. EDD stands for the Employment Development Department. This is usually found in a letter from this agency confirming the SEIN. You may have this letter with all of your formation documents.

Former business owners or employees find the EIN on any W-2s issued by the company for you. The SEIN is also on other business records like bank statements because an SEIN is required to open a bank account. The SEIN is located in the section where the account holder's SSN is typically located.

City, county, or state licenses necessary for your businesses usually also have the SEIN listed on them. If you cannot reach the EDD, try one of these agencies to obtain your SEIN. It is also available on tax returns filed for your business in previous tax years. Any W-2s issued for employees also have this information.

You can find your SEIN online too. You will be prompted to create an online business account after applying for and getting an EIN. For those who haven't registered, you have to set up a username and password to receive online access to the business account portal online. The SEIN is listed on the account.

Common Uses for SEIN in California

California’s SEIN is essential for state payroll taxes and unemployment insurance reporting. For employers, the SEIN must be included on employee W-2s and payroll documents. It is also necessary when applying for certain state-based permits or business licenses and is often requested when interacting with California's Employment Development Department (EDD). The SEIN is a primary identifier in state-level business communications and transactions, helping streamline reporting for employers and maintain compliance with state employment laws​.

Who Needs a California EIN?

Not all businesses are required to have an EIN, but in some cases it may be beneficial to have one even when it is not necessary. EINs are required for C or S corporations, partnerships, specific kinds of LLC, and wage-paying businesses. Those that file employment, excise, fiduciary, or alcohol, tobacco, and firearms taxes must have an EIN.

Businesses with one employee who have paid out at least $100 in wages per quarter must file state payroll taxes.  Those who employ household employees such as domestic workers also qualify for this requirement. In this instance, an individual or a business can obtain a Payroll Tax account number at the EDD's website.

Determining if Your Business Requires an SEIN

Businesses must register for a California SEIN if they meet certain requirements for state payroll taxes. This generally includes businesses with employees who earn more than $100 in a quarter. Household employers, such as those hiring domestic workers, also need to apply for an SEIN if wages meet the specified threshold. Additionally, any entity responsible for reporting employee wages, benefits, or withholdings to the state requires an SEIN. The SEIN is distinct from the EIN and is specifically intended for compliance with California employment tax laws, making it critical for businesses with a California workforce.

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