For businesses, an employer identification number (EIN) is a unique ID issued by the Internal Revenue Service (IRS) that acts as a key identifier. New York businesses must comply with IRS rules regarding EINs, so having an understanding of how they work is important if you’re running a business in the state.

In this article, we’ll answer some of the most frequently asked questions about federal employer identification numbers, from how to get an EIN to how to use them for compliance in New York. We’ll also look at how working with business lawyers and other legal professionals can help you properly use and maintain your EIN as part of your taxes and other business operations.

What Is a Federal Employer Identification Number (EIN)?

At its most basic level, a federal employer identification number is a unique nine-digit ID assigned to a business. The IRS issues this number to be used as a key identifier when filing taxes and garnering other government services.

The EIN is often compared to a Social Security Number since it helps the government track activities conducted in the name of a business. Whenever you need to purchase a lease for business-related activities or open a business bank account, the EIN will be required.

Whom Is an EIN For?

This type of number is primarily used for business owners, however, EINs can also be used to identify certain institutions, estates, trusts, and even other entities. For example, an EIN is required for any entity that pays wages, such as non-profits, estates, the federal government, and more.

The Basics of Getting an EIN

Most EINs are obtained by submitting IRS Form SS-4. This form can be filed online or over the phone with the IRS depending on the nature of your business. Business owners must provide their name, address, and social security number. The IRS also requires the business owner to detail any existing EINs associated with the company, as well as answer questions about the organization.

Once a business is approved, the IRS will send an email confirming the EIN has been allocated to the business in question.

What Is the Difference Between a Federal and State EIN?

Most businesses are required to obtain a federal employer identification number since this is the number associated with taxes, filing, and other business activities on a federal level. States such as New York may also require businesses to obtain a local EIN.

Though a state EIN is similar to a federal EIN, it is important to note that the numbers are not interchangeable. Businesses must obtain a state EIN and a federal EIN in order to comply with respective federal and state laws.

Is It Possible to Change an EIN?

If your business experiences a name change or is acquired by another business, it is possible to change an EIN. This is done by filling out the IRS Form 8822-B and mailing it to the IRS address listed on the form.

How Can an EIN Help With Compliance?

In addition to helping businesses comply with local and federal laws, an EIN is a useful tool when filing taxes. Having an EIN simplifies the process of filing taxes and other company-related activities by allowing the IRS to track any tax filings and other activities.

Having an EIN is also a key requirement for any business that needs to apply for other essential services, such as bank accounts, licenses, and office spaces in New York.

How Can UpCounsel Help?

Navigating the legal aspects of business operations is not always a straightforward process. That’s why it’s important to have a legal professional who can answer questions related to employer identification numbers.

At UpCounsel, we provide businesses with access to experienced legal professionals who can help with all aspects of their operations, from tax-related questions to setting up the right EIN. Business lawyers from our network have average 14-year experience and come with real-world testimonies from past clients.

UpCounsel’s network of experienced legal professionals are at the ready to make sure your New York business remains compliant with all local and federal laws.


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