Do You Need an EIN to Apply for 501(c)(3)?

An Employer Identification Number (EIN) is required for any organization seeking to obtain 501(c)(3) status from the Internal Revenue Service (IRS). An organization is not permitted to file its application for tax-exempt status, Form 1023, without first securing an EIN. This unique nine-digit number functions like a Social Security Number, serving as the primary federal identifier for a business entity, including a nonprofit.

Obtaining 501(c)(3) status recognizes an organization as a charitable entity, exempting it from federal income tax. The EIN is the number the IRS uses to track the organization through the application process and for all future reporting requirements. Without this number, the IRS cannot process an application for tax-exempt status.

Information Required to Obtain an EIN

Before applying for an EIN by submitting Form SS-4, an organization must gather specific information. This includes the legal name of the nonprofit as it appears on its formation documents, such as the articles of incorporation. The organization’s mailing address and physical location must also be provided.

The application requires identifying a “responsible party,” which for a nonprofit is a principal officer, director, or trustee. This is the person who has ultimate control over the entity. The application requires this person’s full name and their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

You must also provide the organization’s entity type, such as a nonprofit corporation or trust. Other required information includes the date the organization was legally formed and the closing month of its accounting year. The form requires a reason for applying, which for a new organization is “started a new business.”

The Process of Applying for an EIN

The IRS offers several application methods, with the online option being the fastest. Available on the IRS website, this process provides the EIN immediately upon completion. The online portal guides users through a series of questions based on Form SS-4.

For those unable to use the online system, applications can be submitted by fax or mail by completing Form SS-4. The processing time for these methods is longer. An application sent by fax may take around four business days, while a mailed application can take four weeks or more.

There is no fee to apply for an EIN directly from the IRS, regardless of the method chosen. An organization should only apply once to avoid being assigned duplicate EINs. After processing the application, the IRS issues a confirmation notice with the new number.

Using Your EIN for the 501(c)(3) Application

The newly acquired EIN must be included on the application for tax-exempt status. Whether the organization files the standard Form 1023 or the streamlined Form 1023-EZ, the EIN must be entered in the designated field. The IRS will not begin its review of an application that does not include a valid EIN.

Beyond the application, the EIN has other practical uses, such as opening a bank account in the organization’s name. Maintaining a separate bank account is important for managing finances and demonstrating accountability. This separation of the organization’s funds from personal funds is a practice the IRS examines during its review.

The EIN will also be used for any state-level registrations or filings that may be required, such as registering for charitable solicitation permits. It is also necessary if the nonprofit plans to hire employees, as it is used for payroll tax reporting.