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.
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:
- Your business is classified as a C-corp, LLC or partnership
- Your business files excise or employment taxes
- Your business files for alcohol, tobacco, or firearm tax returns
- Your business has a Keogh plan
- Your business withholds taxes on any income paid to a non-resident alien
- Your business deals with estates, trusts, real estate investments, non-profit organizations, employee plans, or farmers’ cooperatives
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:
- Find the notice you received from the IRS when you applied for your EIN. This is the confirmation that you applied for and received the number.
- Contact any financial institutions where you used your EIN to open an account or apply for a loan to secure your EIN.
- Reach out to any state or local agencies where you applied for licensing -- they should have your number.
- Locate any tax returns you have filed under your EIN -- your number should be noted there.
- Call the IRS Business and Specialty Tax Line at 800-829-4933 and ask them to search for your EIN. They are open from 7am to 7pm, Monday - Friday. Be ready to provide identifying information so they can prove your authorization and give you your EIN over the phone. If you’re a sole proprietor, member of a partnership, corporate officer, trustee, or estate executor, you should be able to get your EIN from the IRS.
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:
- An Employer ID, which is the equivalent to a taxpayer ID for businesses.
- A Social Security Number, which is like a taxpayer ID for an individual person.
- An Individual Taxpayer Number, which is for people without a Social Security Number
These numbers are often talked about as “Tax ID Numbers.”
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