Does an EIN Expire: Everything You Need to Know
No, EINs — Employer Identification Numbers — don't expire. However, certain situations may cause you to have to obtain a new one.3 min read
2. The Need for an EIN
3. Where Confusion Came in Regarding EIN Expiration
4. Using an EIN
5. Changing an EIN
Updated October 23, 2020:
Does an EIN expire? No, EINs — Employer Identification Numbers — don't expire. However, certain situations may cause you to have to obtain a new one.
What Is an EIN?
EINs, like Social Security Numbers, are nine digits long, but they're formatted differently than SSNs. An EIN's format is xx-xxxxxxx. All companies that file business tax returns or pay employees must have an EIN. You can obtain an EIN from the IRS. This number is also known as a TIN, or taxpayer identification number, but it's not the same thing as an Individual Taxpayer Identification Number (ITIN).
The Need for an EIN
The only businesses that don't need an EIN are sole proprietorships or single-owner LLCs with no employees that file no pension or excise tax returns. A sole proprietor may simply use his or her SSN as the taxpayer ID identification number.
However, sole proprietors who meet the following conditions do need EINs:
- They employ one or more people and pay wages.
- They file excise or pension tax returns.
If your LLC has more than one owner, or member, or has employees, you'll need an EIN.
Where Confusion Came in Regarding EIN Expiration
In 2014, the Internal Revenue Service stated that, starting immediately, Individual Taxpayer Identification Numbers (ITINs) would expire if no one used them on a federal income tax return for five years in a row. This created some confusion among individuals.
Some people wondered if this included SSNs and EINs. The answer to SSNs and EINs expiring is that they don't. Once you have one of those, it's yours forever. You don't have to reapply for one at a later date. Only people who have ITINs have to meet certain conditions to keep these numbers.
Anyone who's a U.S. citizen, permanent resident, or temporary alien resident with authorization to work in the U.S. must have an SSN.
In 2014, the IRS reported that only about 25 percent of ITINs had ever been used on tax returns. An ITIN is for people who are ineligible for SSNs, such as nonresident aliens or foreign nationals. The IRS issues an ITIN for them as a tax processing number so they can file certain federal tax or information returns.
No one should have an SSN as well as an ITIN. For instance, someone with a pending SSN application will not be issued an ITIN even if the individual submits a Form W-7.
Using an EIN
When you start a business, one of the important steps you'll take is applying for an EIN. You use this number instead of your SSN when filing business taxes.
EINs give business owners a measure of privacy. If you disclose your SSN to clients, you run the risk of personal identity theft. Using an EIN instead reduces the chances of you being an identity theft victim.
If you misplaced or lost your EIN, find a previous tax return for your business. The number should be on the return. If you used an EIN to open a bank account or apply for some type of state or local license, you can contact the bank or agency to find your EIN. If you're still having trouble finding it, contact the Business and Specialty Tax Line at the IRS.
Changing an EIN
If you have an EIN already but your business changes ownership or organizational structure, you may have to apply for a new number. The following circumstances will require someone to obtain a new EIN:
- An existing business is inherited or purchased by someone who plans to run it as a sole proprietorship.
- A sole proprietorship becomes a corporation or partnership.
- A corporation becomes a sole proprietorship or partnership.
- A partnership becomes a corporation or sole proprietorship.
- An individual owner dies, and his or her estate takes control of the business.
You may or may not need an EIN, depending on the type of business you operate. However, even sole small business owners often find it beneficial to have an EIN because they can use it instead of their Social Security Number. This provides some protection and privacy in these days of identify theft dangers.
If you need help with EINs, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.