Key Takeaways:

  • A federal tax ID number, also called an EIN (Employer Identification Number), is necessary for many business functions including tax filings, opening bank accounts, and hiring employees.
  • Businesses must meet certain IRS criteria to require an EIN, and there are specific events that trigger the need for a new EIN.
  • The IRS offers multiple methods to apply for an EIN, including online, fax, phone (for international applicants), and mail.
  • Understanding the responsible party for EIN applications and what information is required is key to a successful application.
  • A federal tax ID is free from the IRS and separate from state tax ID numbers, which may be required as well depending on business activities.
  • EINs help maintain legal and financial separation between an individual and a business.
  • You can look up an EIN for another business through public directories or databases like EDGAR.

What Is a Federal Tax ID?

A federal tax ID number is a nine-digit, unique identifier for a business, similar to a Social Security number (SSN) for an individual. It's also sometimes called an Employer Identification Number (EIN). This number is assigned by the federal government through the Internal Revenue Service (IRS), who gives one to businesses within the United States and its territories, though not every type of business needs an EIN.

The EIN has several uses. It is used to:

  • File tax returns and other business documents
  • Tie employees to the employer when the employer sends in the taxes withheld from paychecks
  • Open bank accounts and lines of credit
  • Apply for a business license or permit
  • Make electronic payments
  • File electronic tax returns

Why Businesses Need a Federal Tax ID Number

A federal tax ID number is essential for many business activities beyond tax reporting. Even if it’s not required by law for your specific business structure, having one can enhance your business's credibility and operational efficiency. It helps you:

  • Separate your personal and business finances, protecting your identity and personal credit.
  • Establish legitimacy with suppliers, clients, and financial institutions.
  • Meet vendor registration or contracting requirements.
  • Comply with IRS and state tax obligations if your business sells goods or has employees.

Even some sole proprietors may opt for an EIN to avoid using their Social Security number on public or legal documents.

Facts About EIN Filing Service, a Third-Party Designee

You can apply for your EIN online through a third-party vendor, EIN Filing Service, by visiting https://irs-tax-id.com. This group is not affiliated with any department of the federal government; they simply offer the service to their clients for a fee. This is a secure way to apply in which someone else takes care of all the paperwork, saving you time. The online portal gathers the relevant information for accuracy. You get your number via email, and it's ready to use right away. A paper copy comes in the mail later.

Down the road, if you need to make changes to your business information, EIN Filing Service can help with that too at no charge. It's easy and fast, and it's ideal for people and businesses that don't like completing paperwork.

Requirements for a Federal Tax ID Application

Sole proprietorships don't have to get an EIN, but they can if they prefer to do business that way instead of using the owner's Social Security number. There are pros and cons to using a personal SSN for business purposes.

For some categories of businesses, getting an EIN is legally required as opposed to optional. If your business has any of the following characteristics, you must apply for an EIN.

  • Has employees and withholds taxes to submit to the IRS
  • Is a corporation or a business partnership
  • Files an employment, excise, alcohol, tobacco, or firearms tax return
  • Withholds taxes on one or more non-resident aliens (besides wages)
  • Has a Keogh plan
  • Is involved with real estate, mortgage investments, or estates or trusts (other than a few specific exclusions)
  • Is a nonprofit organization, farmers' cooperative, or plan administrator
  • Offers goods or services that are taxed in any way
  • Is required to collect and remit sales taxes

Once you've established that you need an EIN, the next step is choosing the right kind for your type of business. Some possibilities are sole proprietorship, corporation, LLC, partnership, nonprofit, or estate.

You also need to state why you are applying at this time. This could be a new business, or maybe you've been operating under your SSN and want to set up an EIN to avoid that. Your request might also be related to hiring new employees or setting up a pension plan. Finally, you'll need to fill in what field you're in and what products or services you offer and give your name and SSN to complete the form.

Once an EIN is assigned, it's never canceled so that a historical record is maintained. Even if a business closes, the account is closed, but the number stays available for future reference.

Who Qualifies as the Responsible Party?

The IRS defines the “responsible party” as the person who ultimately owns or controls the business entity or who exercises effective control over it. This person must be an individual (not an entity) and must provide their personal information, including their Social Security number, on the application.

For most small businesses, the responsible party is the business owner or a principal officer. Having an accurate responsible party listed ensures proper correspondence with the IRS and avoids delays in compliance issues.

How to Apply for a Federal Tax ID Number

There are several ways to get an EIN assigned to your business. No matter which you choose, the IRS gathers some standard information during the application process. They use this information to classify businesses, but it's also a security measure to make sure you are the person who has the authority to apply for the EIN.

When you begin the process, you must give some basic information about your business, including the structure, contact information, and the services and/or products available. If you're not applying for yourself, you will need to choose a "responsible party" to serve as the contact for the application. Whoever the primary applicant is, he/she must give their personal details, such as Social Security number (SSN).

Once you know that you need an EIN, you can apply for one with the IRS in one of four ways: online, by fax, in the mail, or by phone. The application form is the Form SS-4 if you're looking for it on the IRS website.

1. Online is the fastest and easiest way if you are applying from inside the United States. The person completing the application should be the person or people who are responsible for the business. The number is available immediately, and you get a downloadable form that you can save and print if you need it later.

2. The application is short, requiring only about 20 minutes. However, you must finish it in a single session, or the system will log you out if you're inactive for 15 minutes or more. Just go to IRS.gov and find the Employee Identification Number Assistant page to get started. The link is at the bottom. This method is available to all legally recognized business forms in the United States and its territories.

3. Only international applicants can apply by phone. The toll-free number to the IRS for this process is 800-829-4933, and the hours of availability are 7 a.m. to 10 p.m. local time for the business. An IRS staff person will take the relevant information and give the EIN at the end of the call.

4. Another way to apply is to send an application by fax using Form SS-4. The fax number to use depends on the state where the business is; you can find them at IRS.gov. If the applicant puts a return fax number on the form, the IRS will send the EIN in four business days.

5. You can also apply for an EIN via regular mail. This takes up to four weeks, so it's the slowest of the four options. The IRS returns your EIN to you in the mail.

How Long Does It Take to Get an EIN?

The method you choose to apply for a federal tax ID number affects how quickly you receive it:

  • Online: Instant issuance once the application is completed.
  • Fax: Typically within 4 business days if you include a return fax number.
  • Mail: Up to 4 weeks depending on mail processing times.
  • Phone: Immediate for international applicants after verification.

If you need an EIN quickly, applying online is the most efficient option.

Applying for a State Tax ID Number

A federal tax ID number is used for federal purposes, but you may also need a state tax ID number if your business:

  • Sells taxable goods or services
  • Has employees
  • Pays state excise taxes
  • Operates in a state that imposes business income or franchise taxes

The state tax ID functions similarly to an EIN but is issued by your state’s revenue or taxation department. Requirements and processes vary by state, so it's important to check with your local agency to register and remain compliant.

Is a New Tax ID Number Needed When a Business Is Already Operating?

Sometimes you need to replace your tax ID number.

  • If you've lost your EIN as opposed to applying for a new one, you can call the Business & Specialty unit of the Internal Revenue Service at 800-829-4933 for help.
  • If the structure of your business changes, you may need a new EIN.
  • In the case of a bankruptcy filing, it's best to get a new EIN.

What Is the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)?

If you're searching for the EIN of a publicly traded company or a nonprofit organization, there are free directories that can help. You can search by business name, ZIP code, tax ID, and other data. You can try searching for just the first few letters of the business name because the name that the organization is commonly called may not be the legal name.

Try EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, for publicly traded companies. It's maintained by the Securities and Exchange Commission (SEC). The EIN is also listed on 8-K, 10K, or 10-Q reports. If you're looking for the EIN of a nonprofit organization, try Melissa Data, and search by ZIP code of the corporate office and not a local site.

If you must call the business to ask for the EIN, try the Accounting Department or Human Resources as they are the ones most likely to have that on file.

How to Recover a Lost Federal Tax ID Number

If you’ve lost or misplaced your EIN, you can recover it using one of the following methods:

  • Check previous IRS correspondence or tax returns that included the number.
  • Contact your bank if you used the EIN to open a business account.
  • Call the IRS Business & Specialty Tax Line at 800-829-4933 to request assistance.

Keep your EIN documentation secure to avoid delays in future applications or compliance tasks.

When You Don’t Need a New EIN

While some business changes require a new EIN, others do not. You do not need a new federal tax ID number if:

  • You change your business name (but not the structure).
  • You move your business to a new location.
  • You open a new bank account.
  • You add a new location or line of business under the same entity.
  • Your partnership admits new partners without dissolution.

Understanding these distinctions helps prevent unnecessary reapplication and keeps your IRS records consistent.

Frequently Asked Questions

1. Do I need a federal tax ID number if I’m self-employed? Not necessarily. Sole proprietors without employees or tax obligations beyond personal income tax may not need an EIN, though they can still apply for one to separate personal and business finances.

2. Is there a fee to apply for a federal tax ID number? No. The IRS provides EINs at no cost. Be cautious of third-party services that charge a fee for what is otherwise a free process.

3. Can I use my Social Security number instead of an EIN? Sole proprietors can use their SSN, but an EIN is safer for privacy and may be required in certain business transactions.

4. How soon can I use my EIN after getting it? Immediately. If you apply online or by phone, your EIN is ready to use right away for banking, tax filings, and licensing.

5. Can I change the responsible party on my EIN? Yes. You must file Form 8822-B with the IRS to report a change in the responsible party or address associated with the EIN.

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