Is a UEI the Same as an EIN? Key Differences Explained
Understand the distinct roles of federal identification numbers. Learn why an EIN differs from a UEI and how each serves unique government purposes.
The Unique Entity Identifier (UEI) and the Employer Identification Number (EIN) are distinct federal identification numbers, each serving different purposes and issued by separate government agencies. While both are important for entities interacting with the federal government, they are not interchangeable. Understanding their specific roles helps clarify why a business or organization might need one, both, or neither.
Understanding the EIN
An Employer Identification Number (EIN) functions as a federal tax identification number, which the Internal Revenue Service (IRS) assigns to businesses, trusts, and estates. This unique nine-digit number, formatted as XX-XXXXXXX, identifies tax accounts for various entities. The IRS utilizes the EIN to track taxpayers required to file business tax returns.
Many businesses require an EIN, including those with employees, corporations, partnerships, and non-profit organizations. Sole proprietors may also obtain an EIN to separate business and personal finances, even if not legally required. The EIN is essential for activities like filing tax returns, managing payroll, opening business bank accounts, and applying for business licenses.
Understanding the UEI
A Unique Entity Identifier (UEI) is a 12-character alphanumeric ID generated by the General Services Administration (GSA) within the System for Award Management (SAM.gov). Its primary purpose is to identify entities seeking federal contracts, grants, or other forms of federal financial assistance.
Entities interacting with the federal government for funding or contracts use the UEI to ensure transparency and streamline identification. This identifier helps the government track how federal funds are allocated and disbursed. Organizations, whether public, private, or non-profit, must obtain a UEI to do business with the federal government.
Key Distinctions
The fundamental differences between an EIN and a UEI lie in their issuing authorities, primary functions, and application requirements. The IRS issues the EIN, making it a tax identification number used for federal tax reporting and compliance. In contrast, the GSA, through SAM.gov, generates the UEI, which identifies entities seeking or receiving federal awards.
An EIN is necessary for most business operations, facilitating tax filings, payroll, and financial transactions such as opening bank accounts. A UEI is for organizations that engage in business with the federal government, whether through contracts or grants. An EIN is a 9-digit numerical identifier, while the UEI is a 12-character alphanumeric code. An entity may need both an EIN for tax purposes and a UEI for federal funding opportunities, but one does not substitute the other.
Obtaining an EIN
Applying for an Employer Identification Number (EIN) is a free process directly through the IRS. The fastest method is to apply online via the IRS website, which typically provides the EIN immediately upon completion. Before applying, businesses should ensure their legal entity is formed with their state, as this can prevent application delays.
Applicants will need to provide specific information, including the legal name of the entity, its type (e.g., corporation, LLC, partnership), and the reason for applying. The name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the responsible party are also required. While online application is the fastest, Form SS-4 can also be submitted via fax or mail, though processing times will be longer.
Obtaining a UEI
To obtain a Unique Entity Identifier (UEI), entities must register or validate their information through SAM.gov. This process is free of charge. The UEI is assigned as part of the SAM.gov registration, which involves creating an account and providing details about the entity.
Information required for UEI registration includes the entity’s legal business name and physical address. The entire registration process for federal funding opportunities, including obtaining a UEI, can take approximately 7-10 business days.