If you’re a business owner in the City of Chicago and need a tax identification number to comply with various IRS regulations, you can easily obtain one by registering with the Illinois Department of Revenue. The process for obtaining a tax ID number in Chicago can be completed online and applying for a dedicated tax ID number can be a helpful way to quickly and securely identify your business to the IRS and other government agencies.

Having a valid tax ID number, or employer identification number (EIN), is a requirement for certain businesses operating in Chicago and other cities in the US. In addition to providing a secure tax ID number, businesses can take advantage of additional tax benefits associated with obtaining an EIN. If you’re a Chicago business owner and are unsure if you need a tax ID number, consulting with a local attorney or financial expert can help you determine the specific requirements for your business.

Below, we’ll discuss what a tax ID number is, how to get one, and what important extra steps you should consider taking after you’ve acquired an EIN for your business. By the end of this article, you’ll gain a better understanding of the basics of tax identification numbers and be able to confidently apply for your business's ID number.

What is a Tax ID Number?

A tax ID number, also referred to as an Employer Identification Number (EIN), is a 9-digit number issued to business entities through the Internal Revenue Service (IRS). It’s used as a unique identifier of the taxpayer – in this case, the business. A business typically needs a tax ID number to open a business bank account, hire employees, and file taxes.

A tax ID number can be similar to a Social Security number (SSN) for an individual since it acts as a tool to track a business’s financial activity and ensure that it is in compliance with applicable government regulations. Businesses that are legally required to obtain an EIN include:

Sole proprietorship (SP)

Partnership

Corporation

S-corporation

Why Do I Need a Tax ID Number?

In Illinois, businesses can obtain a tax ID number from the Department of Revenue. Gaining a tax identification number allows businesses to report any relevant taxes to the IRS and receive certain tax deductions related to the business. There are other situations besides being legally required to obtain a tax ID number that may benefit a business’s financials, such as needing to open a business bank account, hiring employees, taking out a loan, or other business transactions that affect financial operations.

How to Get a Tax ID Number in Chicago

Once you’ve determined that you need to obtain a tax ID number, you should then consider the process for how to get a tax ID number in Chicago. Generally, there are two steps you must complete when applying for a tax ID number in Chicago:

Register with the Illinois Department of Revenue

Apply online for a dedicated EIN

When you register with the the Department of Revenue, you will be issued a Certificate of Authority to do business in the state of Illinois. This Certificate of Authority will contain your business’s employer tax ID number as provided by the IRS. The Certificate should be kept in a secure place as proof of your business’s legal authority to conduct business in the state.

The process for obtaining a tax ID number in Chicago then involves applying online for a dedicated EIN from the IRS. After you register with the Department of Revenue, the IRS site will provide a series of questions requiring specific information about the business that you must complete to obtain an EIN. Once you’ve completed the application, the IRS will review your application and provide you with a unique EIN for your business in Chicago. The EIN will be sent to the email contact you provided on the application.

Additional Steps After Acquiring an EIN

Gaining an EIN from the IRS does not automatically establish you as a legally registered business in Illinois. It simply gives you access to a tax identification number assigned to your business for tax compliance. You still must register the business with the Illinois Secretary of State’s Office, create a state income tax withholding account with the Illinois Department of Revenue, and register the business for Illinois Unemployment Insurance, if applicable.

If you have any doubts about registering your business in Illinois or aren’t sure how to move forward after you’ve acquired an EIN, consulting with a local attorney can provide you with the professional legal counsel you need to make sure you’re in compliance with all appropriate laws and regulations in your locality. At UpCounsel, we specialize in connecting business owners to specialized lawyers that can provide the knowledge needed to complete these additional steps in registering your business.

Topics:

Tax ID number,

Chicago,

EIN