When starting a business in New York, one of the most crucial steps is to obtain a Federal Employer Identification Number (FEIN). A Federal Employer Identification Number, referred to as an EIN, is a unique identify assigned by the Internal Revenue Service (IRS). Not only is a business’s EIN crucial for the purpose of filing taxes, but obtaining an EIN is also necessary for the formation of business entities, opening a business bank account, and even interacting with the IRS – either to gather important information or dispute potential issues related to the business’s finances.

However, there are particularly complicated rules and regulations associated with obtaining an EIN, itself. Not only do business owners need to ascertain if they are even required to have an EIN, but understanding relevant New York state laws, potential deadlines, and caveats to consider requires a certain level of expertise – especially when incorrectly filing for an EIN could result in costly and time-consuming penalties. This is why, for New York businesses, understanding the basics of an EIN, as well as the five most important considerations for obtaining an EIN in this particular state, is paramount to the success of any venture.

First and foremost, businesses are required to obtain an EIN in New York if they:

1. Hire employees

2. Operate as a corporation or partnership

3. Withhold taxes on income, other than wages, paid to a non-resident

4. Have a Keogh plan

5. Are involved with certain types of organizations

When applying for an EIN, businesses must also remember that the process is completed online via the IRS website. Additionally, the person applying for the EIN must possess the official authorization to do so (i.e., either be a principal of the business, a partner, or a corporate officer). The other important consideration is that any business that is based in New York, and is required to obtain an EIN, must file with the state of New York as a domestic business – particularly one that is created in New York, as opposed to one that is acquired through a recent merger.

Further, businesses must realize the important distinction that acquiring an EIN is distinct from having the documents to form a business. The former involves registering with the IRS, and the latter is the process of formally understanding the structure of the entity and having necessary documents filed with the state. It’s also important to remember that there are certain turnaround times associated with obtaining an EIN, and, depending on the entity’s type and purpose, this could be anywhere from 72 hours to 10 business days.

The most important factor to consider is the need to be well-informed of all laws and regulations associated with a business’s particular formation and structure. Qualified attorneys can ensure that businesses are properly registered and avoid potential legal issues and unnecessary fees through understanding specific details and requirements for setting up a business in New York.

When filing for an EIN in New York, businesses must remember the important distinctions associated with filing for an EIN, the necessary documents needed to file, and the turnaround times for the process. Having qualified legal support through UpCounsel will ensure that your business’s EIN represents the relevant formality and protects you against potential issues with relevant state and federal regulations.

Topics:

Federal Employer Identification Number,

EIN,

New York businesses