How To Get a Tax ID Number For a Business: Your Guide to Obtaining an EIN

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining business advice from a Certified Public Accountant (CPA) or tax lawyer

Starting a new business in the United States? One of your first tasks is getting a federal Tax Identification number, better known as an employer identification number (EIN). Think of it as a social security number for your business that banks need to open your business account, and the IRS needs to process your taxes. And if you plan to hire anyone, you can’t do that without one either.

Getting an EIN is free and takes a few minutes if you apply online (although this is only available for SSN holders), but is also possible via mail or fax. We’re going to walk you through the process on how to apply for a tax ID number and make sure your business starts off on the right foot.

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Table of contents
What is a Business ID Number? Do You Need an EIN? What about Sole Proprietorships and Single-Member LLCs? How to Get an EIN for a Business Gather your information Choose how to apply EIN number for foreign founders Don't forget about state tax IDs What comes after your EIN? Final Thoughts

This article has been written in collaboration with Vincenzo Villamena, CPA and co-founder of Online Taxman and Entity Inc.

What is a Business ID Number?

An EIN is a nine-digit number the IRS assigns to identify your business, similar to how your SSN identifies you as an individual.

You'll use your EIN for several important tasks:¹

• Filing federal taxes: Your business needs this to file income, employment, and excise tax returns.
• Hiring employees: You can’t pay wages or file employment taxes without it.
• Opening business bank accounts: Banks require an EIN to open accounts for most business entities.
• Forming certain business structures: Corporations and multi-member LLCs need an EIN to legally exist.
• Building business credit: Establishing your credit as separate from your personal credit history.

Do You Need an EIN?

While nearly every business will benefit from having an EIN, the IRS mandates that certain business structures and activities must apply for a tax ID number.

The IRS requires certain business types to have an EIN. You need one if you operate as:¹

• A Corporation (all of them, regardless of size)
• A Partnership (general or limited partnerships need a partnership/LLC ID number requirement)
• An LLC with multiple members
• A Single-member LLC that’s taxed as a corporation or has employees (EIN also required to file taxes and open a US bank account)
• Any business that hires employees
• Any business filing specific tax forms (excise taxes, alcohol, tobacco, or firearms)
• Certain trusts, estates, or non-profits

What about Sole Proprietorships and Single-Member LLCs?

If you're a sole proprietor or single-member LLC without employees, you can simply use your social security number. The IRS doesn't require you to get an EIN.

But here's why you might want one anyway:

• Protect your privacy: Would you rather give vendors and clients your SSN or a separate business number? An EIN keeps your personal information more secure.
• Look more professional: A dedicated company tax ID number signals that you're running a legitimate business operation.
• Separate your finances: Most banks want an EIN to open a business account, which helps you maintain clean books and protect your personal assets.

Tax professionals generally recommend taking the time to apply for a tax ID number even if you don't technically need one.

How to Get an EIN for a Business

Learning how to get an EIN number for a business from the IRS is straightforward. You've got three options, but online is fastest for US-based businesses.

One important note: If you're forming a corporation or LLC, register with your state first. The IRS needs your legal entity name exactly as it appears on your state paperwork.

Gather your information

Before you start, have these details ready:²

• Your legal business name and US address
• Information about your "Responsible Party" (the person who controls the business and its finances, along with their SSN, ITIN, or existing EIN)
• Why you need an EIN (starting a business, hiring employees, banking, etc.)
• Your business structure (corporation, partnership, LLC, sole proprietor)
• When your business started or was acquired

Choose how to apply

You can apply online, by fax, or by mail:³

Online (fastest)

Get your EIN within minutes. Available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. You’ll need to complete it in one session since you can't save your progress.

Requirements: Your business must be in the US or US territories, and the responsible party needs a valid SSN or ITIN.

Fax (relatively quick)

Takes about four business days, but can be longer, with some cases taking up to 4 weeks. Fill out Form SS-4, sign it, and fax it to the IRS. Include a return fax number so they can send your EIN back.

Mail (slowest)

Takes four to six weeks. Mail your completed Form SS-4 to the address in the form instructions.

For most US businesses, online is the clear winner. International applicants without a US presence can also apply by phone. Once approved, you'll get a confirmation letter (CP 575 Notice). Save this, as it's your official proof of your EIN.

EIN number for foreign founders

Learn from the Experts at Entity Inc. 🔍

Non-residents don’t need a social security number or US address to apply for an EIN for your foreign-owned business. But without an SSN (or ITIN - individual taxpayer ID number) you cannot use the IRS online portal to request the EIN. You must fill out form SS-4 and submit it by fax or mail. If you have a foreign-owned single-member LLC, you will need the EIN to file tax form 5472 annually. You also need the EIN letter from the IRS, which is the official document for the business tax ID, to open a US business bank account. Some full-service incorporation providers, like Entity Inc., include obtaining an EIN number from the IRS as part of their company formation package.

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Don't forget about state tax IDs

You may be wondering, is a tax ID the same as an EIN number? The answer is that your federal EIN is different from state tax IDs. Most states require separate numbers for:

• State income tax withholding (if you have employees)
• Sales tax (if you sell products or taxable services)
• Unemployment insurance

The application process varies by state. Check with your state's Department of Revenue, Secretary of State, or Department of Labor to see what you need.

What comes after your EIN?

With your EIN, you can open a business bank account. Banks use it to verify your business entity, and it's what makes everything official.

Traditional banks often require stacks of paperwork and branch visits. Modern digital accounts offer a faster route, especially if your business operates internationally.

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Final Thoughts

Your EIN unlocks business accounts, payroll, and proper tax filing. Apply online, and you can get one the same day.

With that sorted, you can move forward with the real work of building your business. Open your business bank account, set up payroll if you're hiring, and make sure you're squared away for tax season. These administrative pieces might not be the exciting part of entrepreneurship, but getting them right from the start prevents headaches down the road.

If international payments are part of your business model, like paying contractors overseas, buying from foreign suppliers, or serving customers in other countries, set up the right financial tools early. Managing multiple currencies and cross-border transactions gets complicated fast. Having systems in place that handle this clearly and transparently means less time wrestling with banking issues and more time focused on growing your business.

The EIN is just the first step, but it's an important one. Once you have it, you're officially in business.

This article has been written in collaboration with Vincenzo Villamena, CPA and co-founder of Online Taxman and Entity Inc.. Originally from Michigan, Vincenzo began his career at PwC before moving abroad in 2005. He founded Online Taxman to help other expats file and optimize their US taxes securely and easily from abroad and Entity Inc., which focuses on US companies for global entrepreneurs, from setup to compliance. He currently resides in Brazil. Online Taxman and Entity Inc. now proudly serves US expats and international entrepreneurs in almost every country in the world.

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Sources:

1. Employer Identification Number | IRS
2. Get an Employer Identification Number | IRS
3. About form SS-4 | IRS