A business that has employees must have an employer identification number (EIN, a 9-digit number in the format 00-0000000). An individual person who sets up a business as a sole proprietorship and has employees must have an employer identification number to separately identify the business. Legal entities such as partnerships, corporations, trusts, estates, and other entities must also have an employer identification number, which also serves as their taxpayer identification number.
Who Needs an EIN
You will need to apply for an employer identification number if:
You have employees,
You have a qualified retirement plan, such as a Simplified Employee Pension (SEP), a Savings Incentive Match Plan for Employees (SIMPLE) plan, including SIMPLE IRA plans and SIMPLE 401(k) plans, or qualified plans such as Keogh or H.R. 10 plans.
You operate your business as a partnership or a corporation, including an S corporation.
You file tax returns for employment taxes, such as Form 941, Employer’s Quarterly Federal Tax Return, for reporting social security and Medicare taxes and federal income tax withholding; Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, and Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
You file returns for excise taxes, such as Form 720, Quarterly Federal Excise Tax Return, and Form 2290, Heavy Highway Vehicle Use Tax Return.
Applying for an EIN
You can apply for an employer identification number on the IRS website, or by mailing or faxing Form SS-4, Application for Employer Identification Number. You should apply for an EIN early enough to ensure that you have it when you need to file a tax return, or make a payment.
If you apply through the IRS website, you should get your number immediately, once your information is validated. If you apply by faxing Form SS-4, you should get your number within 4 business days. If you mail in Form SS-4, it may take from 4 to 5 weeks to get your EIN.