Do I Need an EIN for an Estate and How Do I Get One?

An Employer Identification Number, or EIN, is a unique nine-digit number issued by the Internal Revenue Service (IRS) to identify a business entity. Upon a person’s death, their assets and liabilities are consolidated into a legal entity known as an estate. This estate is treated as a distinct taxpayer from the deceased individual, and for many administrative and tax purposes, it requires its own federal tax identification number. The person responsible for managing the estate, such as an executor or administrator, must determine if an EIN is necessary to properly settle the decedent’s affairs.

Determining the Need for an Estate EIN

A primary reason for obtaining an EIN for an estate involves financial institutions, as most banks require one to open an account in the name of the estate. This account is used for managing the estate’s finances, allowing the executor to deposit funds from liquidated assets, pay the decedent’s final bills and ongoing administrative expenses, and distribute assets to beneficiaries. Without this dedicated account, commingling personal and estate funds can create significant legal and accounting problems.

Tax obligations are another reason an estate needs an EIN. An estate is required to file Form 1041, “U.S. Income Tax Return for Estates and Trusts,” if it generates more than $600 in gross income during its tax year. This income could come from various sources, such as interest, dividends, or rent from properties held by the estate. An EIN is also necessary if the estate has a beneficiary who is a nonresident alien.

Less common situations also trigger the need for an EIN. If the decedent owned a business that continues to operate after their death, the estate must secure a new EIN to report any wages or income generated. This separates the post-death business activity from the decedent’s prior operations. The EIN serves as the estate’s official identifier for all tax filings and communications with the IRS.

Information Required to Obtain an EIN

Before beginning the application, the responsible party—the executor, administrator, or another fiduciary—must gather several pieces of information. This preparation ensures the process is smooth. The application is formally known as Form SS-4, “Application for Employer Identification Number,” and having the correct data on hand is necessary to complete it accurately.

The required information starts with the decedent’s full legal name and their Social Security Number (SSN). You will also need the full name and SSN or Individual Taxpayer Identification Number (ITIN) of the person designated as the responsible party for the estate. The legal name of the estate must be established; it follows a standard format, such as “Estate of [Decedent’s Name].” A mailing address for the estate must also be provided, which is where the IRS will send correspondence.

Dates and decisions are also part of the required information. The date the estate was created is the decedent’s date of death, and this must be entered on the application. The responsible party will also need to decide on the estate’s accounting year-end. While many estates use a calendar year-end of December 31, a fiscal year-end is also an option, which can offer tax advantages. Consulting with a tax professional on this choice can be beneficial.

The Application Process for an Estate EIN

The fastest and most recommended method to apply is through the IRS’s online application portal. This interactive session guides the user through a series of questions to complete the electronic version of Form SS-4. After entering all the data, a final review is permitted before submission. Upon successful validation, the EIN is provided immediately on the confirmation screen, which should be saved and printed for the estate’s records.

For those who prefer not to use the online system, submitting a completed Form SS-4 via fax is another option. The processing time for a faxed application is several business days. Once the application is processed, the IRS will fax back the Form SS-4 with the newly assigned EIN. This method lacks the immediacy of the online portal.

The slowest method is sending the completed Form SS-4 by mail. This process can take several weeks from the date of mailing to the receipt of the EIN. The IRS will mail a letter containing the assigned EIN to the estate’s address provided on the form. This option is best for those not under time pressure to open bank accounts or file tax returns.

Responsibilities After Receiving the EIN

Once the EIN is obtained, the executor or administrator must use it to fulfill their fiduciary duties. The first action is to open a checking account in the name of the estate. This account becomes the central hub for all financial transactions, providing a clear trail of all money that flows into and out of the estate. The EIN must be provided to the financial institution during the account opening process.

The EIN’s primary purpose is for tax reporting and must be included on the estate’s annual income tax return, Form 1041, if one is required. The executor must also provide the EIN to any financial institutions, life insurance companies, or other payers making payments to the estate. This allows them to correctly report the income on forms like the 1099 series.