Do I Need an EIN If I Have No Employees?

An Employer Identification Number, or EIN, is a nine-digit number the Internal Revenue Service (IRS) assigns to businesses for tax filing and reporting purposes. It functions much like a Social Security number does for an individual, providing a unique identifier for the business. While the name suggests its use is for employers, many businesses without employees are required to obtain one for reasons unrelated to payroll.

When an EIN is Required for a Business Without Employees

Federal tax law mandates an EIN for any business that operates as a corporation or a partnership, regardless of whether it has a workforce. This is because these legal structures are considered separate taxable entities from their owners. The IRS needs a distinct number to track their financial activities and tax filings.

Certain tax filing obligations also trigger the need for an EIN, even for a sole proprietor. If your business is required to file Employment, Excise, or Alcohol, Tobacco and Firearms tax returns, an EIN is mandatory. For example, businesses in specific industries, like trucking, may owe federal excise taxes. A business owner who establishes a retirement plan for the self-employed, such as a Solo 401(k) or Keogh plan, will also need an EIN for the plan’s trust.

An EIN is also necessary if your business is involved with entities such as trusts, estates, or non-profit organizations. Beyond IRS mandates, many financial institutions require an EIN to open a business bank account, which is a common step for separating business and personal finances. While this is a bank policy and not an IRS rule, it makes an EIN a practical necessity for many new businesses.

When You Can Use Your Social Security Number Instead

For some business structures, obtaining an EIN is not a federal requirement if there are no employees. The most common example is a sole proprietorship, where you and your business are considered a single entity for tax purposes. This allows you to use your personal Social Security Number (SSN) as the business’s taxpayer ID, reporting income and expenses on a Schedule C with your personal Form 1040 tax return.

This same principle applies to a single-member limited liability company (LLC). By default, the IRS treats a single-member LLC as a “disregarded entity” for income tax purposes, meaning it is not seen as separate from its owner. The owner can use their SSN unless the LLC formally elects to be taxed as a corporation.

Even when not required, some sole proprietors or single-member LLC owners choose to get an EIN voluntarily. Using an EIN instead of an SSN on business documents can help protect against identity theft by limiting the exposure of your personal number. It can also lend a more professional appearance and may be needed to apply for business licenses or credit.

Information Needed to Apply for an EIN

To apply for an EIN using Form SS-4, “Application for Employer Identification Number,” you will need to gather the following information:

• The full legal name of the business and any trade name or “Doing Business As” (DBA) name.
• The business mailing address and physical street address, if different.
• The name and taxpayer identification number (SSN, ITIN, or an existing EIN) of the “responsible party,” who is the individual with ultimate control over the entity.
• The type of business entity, such as a sole proprietorship, partnership, or corporation.
• The primary reason for applying, such as starting a new business, for banking purposes, or changing the entity type.
• The date the business was started or acquired and the closing month of your accounting year.

The EIN Application Process

The IRS offers several methods for submitting Form SS-4, but the online application is the fastest. Using the IRS’s online EIN Assistant tool, you can complete an interview-style application and receive your EIN immediately. This service is available during specific business hours on weekdays.

For those who prefer not to use the online system, applications can be submitted by mail or fax. Applying by fax results in receiving the EIN within about four business days. The mail-in option has the longest processing time, often taking four weeks or more.

After your application is processed, the IRS will send a CP 575 notice, which is the official record of your assigned EIN. The IRS only issues this notice once, so it should be kept in a safe place. If the notice is lost, you can contact the IRS to request a 147-C letter, which is a valid substitute for EIN verification.