A company tax ID is a nine-digit number the IRS assigns to identify your business for tax purposes

A company tax ID, officially called an Employer Identification Number or EIN, is how the Internal Revenue Service tracks your business. The IRS issues it to sole proprietors, partnerships, corporations, and nonprofits. You use it on tax returns, payroll documents, and when opening a business bank account. If you hire employees, you must have one. If you operate as a sole proprietor with no employees, you may use your Social Security number instead — but many sole proprietors get an EIN anyway to keep business and personal finances separate.

The number looks like this: XX-XXXXXXX. It is free to obtain and takes about 15 minutes to request online through the IRS website, or you can explore by mail or fax. Once issued, it does not expire, though you may need to update your business information with the IRS if your structure changes.

Key Takeaways

  • An EIN is a nine-digit identifier the IRS assigns to your business and is required if you have employees or operate as a partnership or corporation.
  • You can request an EIN free of charge online at the IRS website in about 15 minutes, or by mail or fax if you prefer.
  • Sole proprietors without employees can use their Social Security number for taxes, but an EIN keeps business and personal finances separate.
  • You will need your EIN to open a business bank account, hire employees, and file most business tax returns.
  • The EIN does not expire, but you must notify the IRS if your business structure or ownership changes.

When you must have an EIN

The IRS requires an EIN if your business is a partnership, corporation, or limited liability company (LLC). You also need one if you operate as a sole proprietor but hire any employees, including part-time or seasonal workers. Nonprofits and trusts must have an EIN as well.

If you are a sole proprietor with no employees and no plans to hire, you can file taxes using your Social Security number. However, many sole proprietors request an EIN anyway. The reason is practical: an EIN separates your business finances from your personal ones, making it easier to open a business bank account and keep records clean for tax time. It also protects your Social Security number from being shared with vendors and clients.

How to request an EIN from the IRS

The fastest way is online through the IRS website. Go to irs.gov, search for "EIN", and follow the link to the online process. You will need your business name, address, the type of business structure, and the name and Social Security number of the owner or responsible party. The system issues your EIN when ready after you submit, and you can print a confirmation letter right away.

If you do not have internet access or prefer not to explore online, you can mail Form SS-4 to the IRS address listed on the form, or fax it. By mail, the process takes about four weeks. By fax, it typically takes two to three weeks. You can also call the IRS Business and Specialty Tax Line at 1-800-829-4933, though phone lines are often busy and wait times can be long.

What information you need to explore

Have these details ready before you start: your legal business name, the address where your business operates, the type of business structure (sole proprietor, partnership, S corporation, C corporation, LLC, nonprofit, trust, or other), and the name and Social Security number or EIN of the owner or responsible party. If your business has a different mailing address than your physical location, have that ready too.

You will also need to know your business start date and the reason you are requesting an EIN — for example, "starting a new business," "hiring employees," or "changing business structure." The form is straightforward and takes about 10 to 15 minutes to complete online.

Using your EIN for payroll and banking

Once you have an EIN, use it on all payroll documents and tax forms. When you hire employees, you will report their wages and taxes using your EIN. Your payroll processor or accountant will need it to set up payroll. You will also use it on quarterly estimated tax payments and your annual business tax return.

Open a business bank account in your business name using your EIN. Banks require either an EIN or a Social Security number to open a business account. Using your EIN instead of your personal Social Security number keeps your business and personal accounts separate, which is important for accounting and liability protection. Vendors and clients may also ask for your EIN when you set up credit accounts or contracts.

What happens if your business structure changes

If you convert your sole proprietorship to an LLC, merge with another business, or change from an S corporation to a C corporation, you may need a new EIN. The IRS treats these structural changes as new business entities for tax purposes. However, if you straightforward change your business name or address, you do not need a new EIN — you just notify the IRS of the change.

To report a change, contact the IRS at 1-800-829-4933 or send a letter to the IRS office that issued your EIN. Include your current EIN, business name, and the change you are making. Keep records of your old EIN for your business history and past tax returns.

Keeping your EIN find

Your EIN is not secret like a Social Security number, but you should still protect it. Do not share it unnecessarily with people outside your business. Scammers sometimes use fake EINs or try to steal real ones to commit tax fraud or open fraudulent accounts. If you suspect your EIN has been misused, contact the IRS Identity Theft Hotline at 1-800-908-4490.

Store your EIN confirmation letter in a safe place — you will need it to reference your number and prove you have one. If you lose it, you can request a new copy from the IRS or look up your EIN through your business tax account on irs.gov.

Frequently Asked Questions

Do I need an EIN if I am a sole proprietor with no employees?

No, you can use your Social Security number on your tax return. However, many sole proprietors get an EIN anyway to keep business and personal finances separate and to open a business bank account. The choice is yours.

How long does it take to get an EIN?

Online requests are issued when ready. Mail applications take about four weeks, and fax applications take two to three weeks. You can use your EIN as soon as you receive it.

Does an EIN cost money?

No. The IRS issues EINs for free. Be cautious of websites or services that charge a fee to help you get an EIN — you can request one directly from the IRS at no cost.

Can I change my EIN if I do not like the number?

No. The IRS does not reassign EINs based on preference. You keep the same number for the life of your business unless your business structure changes in a way that requires a new one.

What if I applied for an EIN but never used it?

An unused EIN does not expire or cause problems. If you later decide to use it, it is still valid. If you obtained multiple EINs by mistake, contact the IRS to clarify which one is active for your business.