Key Takeaways

  • A tax ID number for LLC (also called a Federal Employer Identification Number or FEIN) is required by the IRS for tax filing, payroll, and business banking.
  • Obtaining a FEIN involves registering your LLC at the state level and applying through the IRS online, by mail, fax, or phone.
  • An LLC uses its tax ID to report income, issue 1099s, open bank accounts, and establish credit — similar to how individuals use Social Security numbers.
  • LLCs can choose how they are taxed (as a disregarded entity, partnership, or corporation), and the FEIN ensures correct classification for federal tax purposes.
  • Designating a responsible party is required when applying — this is the person who controls the LLC’s funds and assets.
  • FEINs are also crucial for building business credit, hiring employees, and protecting owners’ personal information.

“LLC Federal Tax ID number” refers to the federal tax ID number that is necessary for a limited liability company (LLC) to be recognized as a tax payer. A federal tax ID number is obtained in the United States through the Internal Revenue Service.

What is a federal tax ID Number?

National governments usually have an arm that collects taxes from its citizens or subjects and its businesses. The Internal Revenue Service is the arm in the United States. An employer in the United States is required to have a federal tax ID number or a federal employer identification number (FEIN) which are two names for the same thing. Limited liability companies and other structures of business use the FEIN for tax purposes and filing their business tax returns. The FEIN has 9 digits. This number is used for both processing payroll and is required for many banking transactions.

Why an LLC Needs a Tax ID Number

Obtaining a tax ID number for LLC operations is more than just a legal requirement — it’s a foundational step for establishing your company’s financial identity. The IRS uses the FEIN to track all tax-related activity associated with your business. Without it, your LLC may face restrictions when performing essential tasks such as:

  • Opening business bank accounts: Most banks require a federal tax ID before allowing you to open a business checking or savings account.
  • Filing federal and state taxes: The FEIN is necessary for income tax, employment tax, and excise tax filings.
  • Hiring employees: If you plan to hire staff, the IRS requires that payroll taxes be reported under your FEIN.
  • Applying for business licenses and permits: Many local and state agencies require an FEIN on license applications.
  • Building business credit: Lenders and credit bureaus often use your FEIN to track your company’s credit profile, separate from your personal credit.

In short, a tax ID number legitimizes your LLC in the eyes of financial institutions, tax authorities, and business partners, while also adding a layer of protection by reducing the need to share your Social Security number in business dealings.

What are the Steps to get a FEIN?

There are just a few steps to securing an FEIN for a business in the United States. There are requirements at both the State and Federal level. They are:

  1. Form a business properly at the state level
  2. Register the business in a state following the requirements in that state
  3. Apply for an FEIN from the Internal Revenue Service either online or over the phone

This number, once received, is then required for state tax registration, payroll processing, excise tax reporting and most banking transactions. This FEIN is used instead of an owner’s personal Social Security number. An employer in the United States is required to have a federal tax ID number.

How to Apply for a Tax ID Number for LLC

The IRS offers multiple ways to apply for a tax ID number for LLC owners. The process is free and relatively straightforward, but accuracy is crucial to avoid delays:

  1. Online Application (Recommended): The fastest method is the IRS online EIN Assistant. You’ll complete the application and receive your FEIN immediately upon approval.
  2. Mail: Complete Form SS-4 and mail it to the IRS. This option takes about 4–6 weeks.
  3. Fax: Submit Form SS-4 by fax for a processing time of about 4 business days.
  4. Telephone (International Applicants): Non-U.S. applicants can obtain a FEIN by calling the IRS Business & Specialty Tax Line.

Tips for a Smooth Application:

  • Ensure your LLC is officially registered with the state before applying.
  • Double-check the legal name and address to match state registration records.
  • List the correct “responsible party” — the individual who controls or manages the LLC’s funds.
  • Save your EIN confirmation letter (Form CP 575), as banks and agencies often require it for verification.

How does an LLC use the FEIN?

Any time the LLC provides services of more than $600 per year to a business (or individual) the LLC uses the FEIN in order to issue a tax form 1099. In addition, the number is used exactly how an individual would use their own social security number (SSN). In fact, this FEIN is every bit as valuable as a social security number and needs the same high-level security that everyone affords their own SSN. Potential thieves of identity also try and steal FEINs.

Common Situations Requiring a FEIN

Beyond tax reporting, the FEIN is a versatile identifier that plays a role in many areas of your LLC’s operations:

  • Banking and financial transactions: Most banks require an FEIN for opening accounts, applying for loans, or obtaining merchant services.
  • Vendor and client contracts: Companies often request a W-9 form with your FEIN before issuing payments.
  • Filing employment taxes: Employers must use their FEIN when filing payroll taxes and issuing W-2s or 1099s.
  • Retirement plans: Establishing a business retirement plan (e.g., SEP IRA or 401(k)) requires an FEIN.
  • Business credit applications: Lenders use your FEIN to review financial history and creditworthiness.

How is an LLC taxed?

Limited liability companies are businesses that have a very specific tax identity. The Internal Revenue Service (IRS) allows LLCs to pass taxation to the owners but still be protected from debts and liabilities.

States each have regulations that govern aspects of the business. Aspects like member requirements, naming requirements and cost are all governed by these regulations.

Tax Classification Options for LLCs

The FEIN is also central to how your LLC is taxed. By default, the IRS treats LLCs as pass-through entities, meaning profits and losses are reported on the members’ personal tax returns. However, LLCs have flexibility in their tax classification:

  • Single-member LLCs: Taxed as sole proprietorships unless an election is made to be taxed as a corporation.
  • Multi-member LLCs: Default to partnership taxation but may elect to be treated as a C corporation or S corporation.
  • C Corporation Election: This structure allows profits to be taxed at the corporate level, potentially beneficial for reinvestment strategies.
  • S Corporation Election: Can reduce self-employment taxes if the LLC meets IRS eligibility criteria and files Form 2553.

Your tax ID number for LLC ensures the IRS correctly applies the chosen tax classification and links all filings to your business.

Responsible Parties

A person who has control over assets or funds of the entity is considered to be a responsible party. Further, any individual who has control over the entity’s disposition of its assets and funds is considered to be a responsible party Limited liability companies sometimes have many owners, one of the owners is named the responsible party for securing a FEIN on behalf of the organization. There can only be one responsible party (no matter how many members in the LLC) for obtaining an FEIN.

Changing or Updating a Responsible Party

If your LLC undergoes a change in ownership or management, you may need to update the responsible party associated with your FEIN. The IRS requires notification within 60 days of such a change. This is done by submitting a written request that includes:

  • The LLC’s legal name and FEIN
  • The name and Social Security Number (or ITIN) of the new responsible party
  • A signature from an authorized member or officer

Keeping this information current helps prevent delays in tax processing and ensures proper IRS communication.

Limited Liability Company (LLC) definition

A limited liability company is a business structure that is created at the state level. State statutes define how a business becomes an LLC. The Internal Revenue Service defines LLCs as either a taxable disregarded entity, a partnership or a corporation as not being different from owners for income tax purposes.

  • Limited liability companies with multiple members can be either a corporation or a partnership
  • Limited liability companies with a single member can be taxed either as a corporation or as a taxable disregarded entity
  • Disregarded entities owned by one person is a sole proprietorship
  • Corporations who own a disregarded entity it is a division or branch of that corporation

Other ways to organize a business can be as a limited liability partnership, a partnership, a corporation and a sole proprietorship. Then the way the IRS views the business can be addressed.

Frequently Asked Questions

  1. Do all LLCs need a tax ID number?
    Yes. Most LLCs must obtain a tax ID number (FEIN) for tax filings, hiring employees, opening bank accounts, and applying for business licenses.
  2. Can I use my Social Security number instead of a FEIN?
    While single-member LLCs without employees can technically use a Social Security number, obtaining a FEIN is recommended to separate personal and business finances.
  3. How long does it take to get a tax ID number for LLC?
    Online applications are processed instantly, while mail or fax applications can take several days to weeks, depending on the method.
  4. Is there a fee to obtain a FEIN from the IRS?
    No. Applying for a federal tax ID is free through the IRS.
  5. Can a tax ID number be canceled or changed?
    A FEIN is permanent. If your business structure changes, you may need to apply for a new one, but the original number remains associated with the entity.

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