Frequently Asked Questions: How to Get an EIN Number in New York
Launching a Small Business: Navigating the Complexities of Setting Up an Entity3 min read
When you're launching a small business, you may feel that all the paperwork to set up a limited liability company, partnership, or other business entity is overwhelming. In New York, like in other states, you must apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to comply with legal and tax requirements. This article will answer the questions on how to get an EIN Number in New York, who needs an EIN, how to apply, what paperwork is needed, as well as the cost associated with an EIN and the benefits of having one.
Who Needs an EIN?
Applying for an Employer Identification Number is nearly always a requirement for business owners in New York. Whether you're starting an LLC, corporation, partnership, non-profit organization, or other entity, you must apply for an EIN. Generally speaking, if you own a business that has one or more employees on staff, you must obtain an EIN.
You may also need an Employer Identification Number if you open a solo 401k or other retirement account for your business or if you're looking to open a business bank account. If you are an independent contractor, freelancer, or a sole proprietor living in New York, you may need to apply for an EIN number if you're filing taxes or seeking business loans.
How to Apply for an EIN Number in New York
You have the option to apply for an EIN online, by telephone or fax, or by mail. When submitting an application, you may be required to provide certain information based on the type of entity you're creating.
Applying for an EIN Online or by Telephone
If opting to submit an EIN application online or by telephone, the process should only take about two weeks, with no account activation fees. Applying by telephone is an ideal option if you'd prefer assistance with the application process.
Applying for an EIN by Fax
If you elect to apply for an EIN by fax, you must submit the completed form to the IRS within four business days of the request. This should include Form SS-4 and any other forms required for your specific type of business.
Applying for an EIN by Mail
Some business owners prefer mail-in applications. In this scenario, it's worth noting that the IRS recommends that you print and mail two copies of the form to ensure a swift processing time. If you mail in an application, the IRS recommends allowing up to four weeks to receive a response.
What Paperwork is Needed for an EIN?
When applying for an EIN, it's important to understand that the documents and paperwork required may vary depending on the type of business you're setting up. If you're looking to open a sole proprietorship or LLC in New York, you will likely need to provide proof of your Social Security Number (SSN), as well as the name and address of the business. If you are opening a C-Corporation or an S-Corporation, you will also need a copy of the Articles of Incorporation.
Cost & Benefits of an EIN in New York
Although the cost of obtaining an EIN varies, it's generally around $100, depending on the type of business entity you're creating. The cost may include one-time account setup fees and any applicable taxes.
The benefits of having an EIN in New York are plentiful. An Employer Identification Number enables business owners to legally operate, open bank accounts, hire staff, and access business loans. It's a mandatory requirement to file taxes for businesses, and in some cases, it may be necessary to apply for licenses or engage in business transactions.