An HR Glossary for HR Terms
Glossary of Human Resources Management and Employee Benefit Terms
Federal ID Number
What Is a Federal ID Number?
A Federal ID Number, also known as a Federal Tax Identification Number, is a nine-digit number issued by the IRS and arranged as follows: 00-0000000. It is used to uniquely identify a business entity.
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Are Federal ID Numbers the Same as an EIN?
Federal ID Numbers and Employer Identification Numbers (EIN) are the same and may be used interchangeably.
Is a Payer’s TIN the Same as a Federal ID Number?
A payer's Taxpayer Identification Number (TIN) and Federal ID Numbers are related, but they are not the same.
TIN is an umbrella term for a group of identification numbers the IRS uses to administer tax laws. Federal ID Numbers are a type of TIN. The IRS recognizes a wide variety of TINs, including Social Security Numbers.
These numbers must be furnished when asked on tax returns as well as on withholding certificates under certain circumstances.
What Is a Federal Tax ID Number Used For?
Like Social Security Numbers for individuals, Federal Tax ID Numbers are primarily used to help the IRS easily identify a business for federal tax purposes. This number can also be used for other business-related financial activities, including opening a business bank account, applying for a business loan, and employee payroll distribution tracking.
How Do You Get a Federal ID Number?
You can apply online to receive a Federal ID Number. To make it simple, the IRS has outlined a three-step EIN application process:
1. Determine Your Eligibility
You are eligible to apply for a Federal ID Number if you meet the following criteria:
- Your principal business is located within the United States or a U.S. territory
- You do not already have a Federal ID Number assigned to the responsible party of your organization
- You have a valid TIN
Note that the responsible party must be an individual and cannot be a business entity.
2. Complete the Online Application
You must complete the application in one sitting—you cannot save it and come back to it later. The application will close if you are inactive for more than 15 minutes, forcing you to start over.
3. Receive Your Federal ID Number
After you submit your application, your number will become available immediately. You can use this number to open bank accounts, file tax returns, and apply for business licenses.
If your business ownership or structure changes, you need to apply for a new Employer Identification Number.
Where Can You Find Your Federal ID Number?
There are several places where you can find your Federal ID Number:
- Your EIN confirmation letter
- Your business tax return from the previous year
- Any bank account opened using your EIN
- On 1099-NEC and/or 1099-MISC forms (used to report business payments)
- Your state’s business division website (if your organization is state registered)
- Business loan applications made with your EIN
- Applications for business credit cards
If you don’t have access to any of these documents, you can also request help from the IRS to look up your Federal ID Number. You can call the IRS helpline at (800) 829-4933.
How to Close a Federal Tax ID Number
You cannot close or cancel a Federal Tax ID Number once it has been issued. It is the IRS’s permanent identification number for a business entity, and it will never be reassigned to another business.
However, if you determine you no longer need a Federal Tax ID, you can ask the IRS to close your business account. Simply write a letter to the IRS with the following information:
- Complete legal name of the business
- Business address
- Reason for closing the account
- Copy of EIN Assignment Notice (if available)
Send this information to the IRS:
Internal Revenue Service
Kansas City, MO 64108
It is important to note that your tax filings must be up to date before the IRS can close your business account.
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