Do I Need a Separate EIN for Each DBA?

Business owners often wonder if a separate Employer Identification Number (EIN) is needed for each “Doing Business As” (DBA) name. This article clarifies the relationship between DBAs and EINs, explaining when an EIN is required.

Understanding Business Names and Tax IDs

A “Doing Business As” (DBA) name, also known as a fictitious business name, trade name, or assumed name, allows a business to operate publicly under a name different from its legal name. It functions as an alias for an existing legal entity. For example, a sole proprietorship, partnership, limited liability company (LLC), or corporation might use a DBA to brand a specific product or service. A DBA does not create a separate legal entity.

An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) to identify a business entity for tax purposes. It serves as a federal tax identification number, similar to a Social Security Number (SSN) for an individual. A DBA is a name under which a business operates, while an EIN identifies the legal entity itself.

When an EIN is Necessary

The requirement for an EIN is tied directly to the legal structure of the business and its operational activities, not to the number of DBAs it utilizes. One legal entity generally uses a single EIN, regardless of how many DBAs it operates under. For instance, a sole proprietor using multiple DBAs will typically continue to use their existing EIN or SSN, as the underlying legal entity remains unchanged.

An EIN is mandatory in several common scenarios. Businesses with employees are required to have an EIN for payroll tax purposes. If a business operates as a corporation or a partnership, an EIN is necessary for federal tax filings. Other situations necessitating an EIN include filing excise tax returns, withholding taxes on income (other than wages) paid to a non-resident alien, or operating certain types of organizations such as trusts, estates, or non-profits.

Scenarios Requiring a New EIN

Specific situations trigger the need for a new EIN, distinct from merely adopting a new DBA. These instances involve a fundamental change in the business’s legal structure or ownership. For example, if a sole proprietorship incorporates or takes on partners to become a partnership, a new EIN is required for the newly formed legal entity. If a partnership incorporates or a new partnership is formed, a new EIN is also necessary.

A new EIN is also required if an individual purchases or inherits an existing business and operates it as a different type of entity. These changes necessitate a new EIN because a new legal entity is created or the existing entity’s structure is fundamentally altered. A new EIN is not needed if only the business name or location changes, as these do not affect the legal entity’s structure.

Obtaining an Employer Identification Number

Businesses requiring an EIN can apply through various methods. The most common and often fastest way is to apply online through the IRS website. This method typically results in an immediate EIN assignment upon completion of the application. The EIN application is free; businesses should be wary of third-party websites that charge a fee for this service.

Alternatively, an EIN can be obtained by faxing or mailing a completed Form SS-4, Application for Employer Identification Number, to the IRS. Faxed applications may receive an EIN within four business days, while mailed applications can take approximately four weeks. International applicants have the option to apply by phone. The application requires specific information, including the legal name of the entity, its mailing address, the type of entity, the reason for applying, and the principal business activity.