An HR Glossary for HR Terms

Glossary of Human Resources Management and Employee Benefit Terms

Employer Identification Number (EIN)

What is an Employer Identification Number?

An employer identification number (EIN) is a unique number which is assigned to a business by the Internal Revenue Service. A business’s EIN is permanent, like a taxpaying fingerprint. It never expires or gets recycled for another business. Your EIN may also be referred to as your Federal Employer Identification Number, or FEIN.

Any business that requires an EIN at the federal level will also require one at the state level. Your state will issue your business a State Employer Identification Number, or State EIN. This unique number will be used to file state taxes and hire employees.

What Is the EIN Used For?

Essentially, the IRS uses your EIN to identify your business for the purposes of tracking and paying taxes in the same way they use your Social Security Number to identify you. Using that unique number reduces the likelihood of your business being misidentified as another.

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Do You Need an EIN For Your Business?

Most likely, yes. If you have any employees, you need an EIN. You’ll also need an employer identification number if any of the following apply to you:

Even if you don’t fall under any of those categories, you might still need an EIN to open a checking account or apply for a loan for your business. On the other hand, if you’re running your business as a sole proprietorship and don’t have any employees, you may not need or want an EIN, since you’ll file your business tax return with your personal taxes, using your SSN.

If you think you need one, here is how to get an Employer Identification Number online from the IRS. You’ll need to complete form SS-4, either online or over the phone. You should receive your employer identification number immediately after you complete the application process. For a State EIN, you’ll need to contact the agency that handles employment taxes.

Lost Your EIN?

If you once had an employer identification number but can’t find it, here’s what you’ll need to do:

What’s the Difference Between a Tax ID Number and an EIN?

These terms are often used interchangeably, but the Tax ID Number is a more general term, which may refer to one of several different identification numbers:

These numbers are often talked about as “Tax ID Numbers.”

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