A Federal Tax ID is a nine-digit number the IRS assigns to identify a business or other entity for tax purposes

A Federal Tax ID, also called an Employer Identification Number (EIN), is how the Internal Revenue Service tracks a business, nonprofit, partnership, or corporation. It works the same way a Social Security number works for a person — it is the identifier the IRS uses to file tax returns, report payroll, and match income records.

The number is formatted as XX-XXXXXXX (two digits, a hyphen, then five digits). You will need it to open a business bank account, hire employees, file certain tax forms, and report business income. Even a sole proprietor without employees may need one, depending on the structure of their business.

The IRS does not charge for a Federal Tax ID. You can request one for free through the IRS website, by mail, by fax, or by phone. The process takes minutes online and a few days by mail.

Key Takeaways

  • A Federal Tax ID is a nine-digit number assigned by the IRS to identify a business entity, and it is different from a Social Security number.
  • You need a Federal Tax ID if you operate as a partnership, corporation, nonprofit, or LLC, or if you hire employees as a sole proprietor.
  • The IRS issues Federal Tax IDs for free through its website, by phone, by fax, or by mail, with online requests processed when ready.
  • You will use your Federal Tax ID on business bank accounts, payroll tax forms, business tax returns, and when reporting business income to the IRS.

Who needs a Federal Tax ID

If you operate as a sole proprietor with no employees, you may use your Social Security number on your tax return instead of a Federal Tax ID. However, many sole proprietors get one anyway to keep their personal and business finances separate and to protect their Social Security number from wider circulation.

You must have a Federal Tax ID if you are a partnership, S corporation, C corporation, LLC, nonprofit organization, trust, or estate. You also need one if you are a sole proprietor who hires any employees, including part-time workers or household employees. If you operate a business that requires a state license — such as a salon, restaurant, or contractor business — your state may require a Federal Tax ID even if you have no employees.

Banks will ask for a Federal Tax ID when you open a business account. If you do not have one, you cannot open the account. Some vendors and suppliers also ask for it before extending credit to a business.

How to request a Federal Tax ID online

The fastest way to get a Federal Tax ID is through the IRS website using Form SS-4. Go to irs.gov, search for "explore for an EIN," and follow the online process. You will need basic information: your legal business name, the address where the business operates, the type of business structure, and the reason you need the ID (such as "starting a new business" or "hiring employees").

The online process takes about 15 minutes. Once you submit it, the IRS issues your Federal Tax ID when ready — you see the number on the screen and can write it down or print the confirmation page. You do not have to wait for anything in the mail.

You will need to know your Social Security number or Individual Taxpayer Identification Number (ITIN), the state where the business is located, and the date you expect the business to start or the date you hired your first employee. Have that information ready before you start the process.

Other ways to request a Federal Tax ID

If you cannot use the online process, you can request a Federal Tax ID by phone, fax, or mail. The IRS Business and Specialty Tax Line is 1-800-829-4933. You can call Monday through Friday, 7 a.m. to 7 p.m. your local time. Have Form SS-4 filled out before you call — the agent will walk through it with you and issue the number over the phone.

You can also fax a completed Form SS-4 to the IRS. The fax number depends on your state and is listed on the form itself. Faxed requests usually receive a response within four business days.

Mailing Form SS-4 to the IRS takes longer — typically two to four weeks. Mail the form to the IRS office that serves your state. The address is on the form. You will receive your Federal Tax ID by mail once the IRS processes your request.

What information you need to provide

The IRS asks for your legal business name exactly as it appears on your business license or formation documents. If you operate under a different name — called a "doing business as" or DBA name — you can list that too, but the legal name is what matters for the Federal Tax ID.

You will need the physical address where the business operates, not a mailing address. If you run the business from home, use your home address. You will also need to describe the type of business — for example, "plumbing contractor," "consulting," "retail clothing store," or "nonprofit educational organization."

The IRS asks why you need the Federal Tax ID. Common reasons are "starting a new business," "hiring employees," "opening a bank account," or "forming a corporation or LLC." You will also provide the date you expect to start the business or the date you hired your first employee, whichever comes first.

When you receive your Federal Tax ID

If you applied online, write down or print your Federal Tax ID when ready. The IRS will mail you a formal notice (Form SS-4) within two weeks, but you can use the number right away. You do not have to wait for the letter to open a bank account or file tax forms.

Keep your Federal Tax ID in a safe place. You will use it for the life of the business. If the business closes, you do not need to cancel the Federal Tax ID — you straightforward stop using it and file a final tax return.

If you lose the number, you can look it up on the IRS website or call the Business and Specialty Tax Line. Have your business name and address ready when you call.

Federal Tax ID vs. Social Security number

A Federal Tax ID identifies a business entity. A Social Security number identifies a person. If you are a sole proprietor, you can use your Social Security number on your tax return, but a Federal Tax ID keeps your business finances separate from your personal finances.

Using a Federal Tax ID also means your Social Security number does not appear on business bank accounts, vendor accounts, or other business documents. This reduces the risk of identity theft and keeps your personal and business credit separate. Many sole proprietors get a Federal Tax ID for this reason alone.

If you operate as a partnership, corporation, LLC, or nonprofit, you must use a Federal Tax ID. You cannot use a Social Security number for these business structures.

Frequently Asked Questions

Can I get a Federal Tax ID if I do not have a Social Security number?

Yes. If you are not a U.S. citizen or do not have a Social Security number, you can use an Individual Taxpayer Identification Number (ITIN) to request a Federal Tax ID. You will need to explore for an ITIN first through the IRS, then use that number on your EIN process.

How long does it take to get a Federal Tax ID?

Online applications are processed when ready — you receive the number on the screen. Phone requests are issued the same day. Faxed requests take about four business days. Mailed requests take two to four weeks. You can use the number right away; you do not have to wait for the formal letter from the IRS.

Do I need a Federal Tax ID if I am a freelancer or independent contractor?

Not required, but recommended. As a sole proprietor, you can use your Social Security number on your tax return. However, many freelancers get a Federal Tax ID to keep their business and personal finances separate and to protect their Social Security number from clients and vendors.

What if I already have a Federal Tax ID and need a new one?

You do not need a new Federal Tax ID unless the business structure changes — for example, if you convert from a sole proprietorship to an LLC. If you straightforward change the business name or address, you keep the same Federal Tax ID and notify the IRS of the change.

Is there a cost to get a Federal Tax ID?

No. The IRS does not charge for a Federal Tax ID. Any website or service that charges you to request one is taking your money for something you can do for free on irs.gov.