An EIN is a nine-digit tax identification number the IRS assigns to businesses, not individuals

An Employer Identification Number (EIN) is a nine-digit code the Internal Revenue Service uses to identify your business for tax purposes. It looks like this: 12-3456789. The IRS assigns one to almost every business structure — sole proprietorships, partnerships, corporations, nonprofits, and trusts — though the rules for when you actually need one vary by business type.

The key difference between an EIN and a Social Security Number (SSN) is who uses it. Your SSN is tied to you as an individual and follows you through your personal tax returns. An EIN is tied to your business entity itself. If you run a sole proprietorship with no employees, you may not need an EIN at all — you can use your SSN on your business tax return instead. But if you have employees, operate as a corporation or partnership, or run certain types of businesses, the IRS requires you to have an EIN.

You do not pay a fee to get an EIN. The IRS assigns them for free through their website, by phone, or by mail.

Key Takeaways

  • An EIN is a nine-digit number assigned by the IRS to identify a business entity, separate from the owner's Social Security Number.
  • Sole proprietors without employees can use their Social Security Number on business tax returns instead of obtaining an EIN, though some choose to get one anyway.
  • Businesses with employees, partnerships, corporations, and nonprofits are required by the IRS to have an EIN.
  • You can obtain an EIN when ready for free through the IRS website, or by phone or mail if you prefer.

When the IRS requires you to have an EIN

The IRS requires an EIN if your business falls into certain categories. If you have any employees — even one part-time worker — you must have an EIN. Partnerships, corporations, and limited liability companies (LLCs) taxed as corporations all need one. Nonprofits, trusts, and estates also need EINs.

If you are a sole proprietor with no employees, you are not required to have an EIN, but you may want one anyway. Some business owners use an EIN to keep their personal and business finances separate, or to protect their Social Security Number from being shared with vendors and clients. Banks sometimes ask for an EIN when you open a business account, even if you are not legally required to have one.

Certain industries have additional requirements. If you operate a farm, fish, or produce business; run a pension or profit-sharing plan; or handle excise taxes, the IRS may require an EIN regardless of whether you have employees.

How to obtain an EIN

The fastest way to get an EIN is through the IRS website at irs.gov. Go to the EIN section and use their online process tool. You answer questions about your business structure, location, and the type of work you do. The system assigns your EIN when ready — you see it on screen and can print it right away. You do not need to wait for anything in the mail.

If you prefer not to explore online, you can call the IRS Business and Specialty Tax Line at 1-800-829-4933. They are open Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. A representative will ask you the same questions and give you your EIN over the phone. You can also mail Form SS-4 (process for an Employer Identification Number) to the IRS, though this method takes several weeks.

You will need basic information about your business: the legal name, the physical address, the type of business structure, and what kind of work you do. If you are explore on behalf of someone else's business, you will also need their Social Security Number or EIN. Have this information ready before you start, whether you are explore online or by phone.

What you use an EIN for

Once you have an EIN, you use it on your business tax returns, payroll documents, and when you hire employees. If you have employees, you use the EIN to file payroll tax returns with the IRS and to report wages on W-2 forms. You also use it when you open a business bank account, explore for business licenses, or set up a business credit line.

The EIN appears on documents like Form 1040-C (if you are a sole proprietor filing business income), Form 1120 (corporate tax return), Form 1065 (partnership return), and Form 990 (nonprofit return). It also goes on quarterly estimated tax payments and employment tax forms.

You do not use an EIN on your personal tax return. Your personal income tax return uses your Social Security Number. If you are a sole proprietor without employees, you can choose to use either your SSN or your EIN on your business tax return — the IRS accepts both.

EIN vs. Social Security Number: what sets them apart

An EIN identifies a business; an SSN identifies a person. This matters because a business can have multiple owners, but it has only one EIN. If you are a partner in a partnership, you have your own SSN, but the partnership itself has one EIN that all partners use for business purposes.

An EIN is public information. You may have to share it with vendors, clients, banks, and government agencies. Your Social Security Number is sensitive personal information that you should protect. Using an EIN instead of your SSN for business dealings keeps your personal number more private.

An EIN does not expire and does not change unless your business structure changes — for example, if a sole proprietorship becomes a corporation. An SSN stays with you for life. If your business closes, you do not need to cancel the EIN; you straightforward stop using it.

Common reasons people confuse EINs with other tax IDs

The IRS uses several different identification numbers, which can create confusion. Your Social Security Number is a tax ID for personal income. An EIN is a tax ID for a business. An ITIN (Individual Taxpayer Identification Number) is a tax ID for noncitizens who do not have an SSN but need to file taxes. A PTIN (Preparer Tax Identification Number) is used by tax professionals who prepare returns for others.

If you are self-employed and have no employees, you might not need an EIN at all — you can file using your SSN. But if you hire even one person, or if your business is structured as a partnership or corporation, you will need an EIN in addition to your SSN. The form you file determines which number goes where.

Frequently Asked Questions

Can I use my Social Security Number instead of an EIN?

Only if you are a sole proprietor with no employees. If you have employees, operate as a partnership or corporation, or run a nonprofit, you must have an EIN. Even as a sole proprietor, you may choose to get an EIN to keep your personal and business finances separate.

How long does it take to get an EIN?

If you explore online through the IRS website, you receive your EIN when ready. By phone, you get it the same day. By mail, it takes two to four weeks. There is no fee for any method.

What if I already have an EIN and my business structure changes?

If your business structure changes — for example, from a sole proprietorship to an LLC — you may need a new EIN. The IRS treats the new structure as a different entity. Contact the IRS or speak with a tax professional to confirm whether you need to explore for a new one.

Do I need an EIN if I am a freelancer or contractor?

Not required, unless you have employees or operate as a corporation or partnership. Most freelancers and independent contractors use their Social Security Number on their tax returns. However, some choose to get an EIN to protect their SSN from being shared with clients.

What happens if I lose my EIN?

Your EIN does not change, so you can always look it up. If you cannot find the number, check your business tax returns, bank statements, or payroll records — the EIN appears on all of these. You can also contact the IRS to confirm your EIN if you provide your business name and address.