What Is a FEIN Number in California?

A Federal Employer Identification Number (FEIN), often called an Employer Identification Number (EIN), is a unique nine-digit tax identification number issued by the Internal Revenue Service (IRS) to business entities operating in the United States. This number serves as a business’s federal tax ID, much like a Social Security Number (SSN) identifies an individual. Businesses use their FEIN for various tax-related purposes, including filing tax returns and managing payroll. It is a permanent identifier once assigned and remains unique to that business.

When an FEIN is Required for California Businesses

While the FEIN is a federal identification number, it is frequently required for businesses operating within California for various state-level activities. Any business that employs individuals in California generally needs an FEIN to manage payroll taxes, including withholding taxes from employee paychecks and filing federal and state unemployment taxes.

Beyond payroll, businesses structured as corporations or partnerships, regardless of whether they have employees, are typically required to obtain an FEIN. Even a sole proprietorship, which can often use the owner’s SSN for tax purposes, will need an FEIN if they hire employees or choose to operate as a corporation or partnership.

The FEIN is also commonly requested when opening a business bank account, which helps separate personal and business finances and streamlines bookkeeping. Furthermore, businesses often need an FEIN when applying for various state licenses and permits or securing business loans and lines of credit.

Preparing to Apply for Your FEIN

Before applying for an FEIN, gather specific information. The application requires details about the “responsible party,” who is an individual that owns, controls, or exercises effective control over the entity’s funds and assets. This person must be an individual, not another entity, and their name, along with their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), must be provided on Form SS-4, Application for Employer Identification Number.

You will also need to specify the legal name of your business entity and its complete mailing address. If your business operates under a “doing business as” (DBA) name, include that as well. The application asks for the county and state where the principal business is located.

Identifying your business entity type, such as a sole proprietorship, partnership, corporation, or Limited Liability Company (LLC), is another necessary step. For LLCs, you will need to indicate the number of members. The application also requires the reason for applying for the FEIN, such as starting a new business, hiring employees, or changing the business type. Additionally, if you plan to hire employees, you should be prepared to provide the first date wages will be paid.

Steps to Obtain Your FEIN

Obtaining your FEIN is typically a straightforward process, with the IRS online application being the fastest method. Businesses with a principal place of business in the United States or U.S. territories can apply directly through the IRS website. The online application is generally available Monday through Friday, from 7 a.m. to 10 p.m. Eastern Time. When using the online system, it is important to complete the application in a single session, as it may time out after 15 minutes of inactivity.

Upon successful submission of the online application, the FEIN is typically issued immediately. You should download, save, and print the confirmation letter for your records right away, as it may not be available for download later. Alternative application methods include faxing or mailing the completed form. Faxing generally results in receiving the FEIN back via fax within about four business days if a fax number is provided. Mailing the application usually takes approximately four weeks to receive the FEIN by postal service.

Using Your FEIN for California State Compliance

Once obtained, the FEIN is used for various state-level registrations and compliance requirements in California. Businesses forming a legal entity, such as corporations, LLCs, or partnerships, will generally need their FEIN when registering with the California Secretary of State (SOS). The SOS is responsible for registering business names and entities within the state.

For businesses with employees in California, the FEIN is essential for registering with the Employment Development Department (EDD). The EDD manages state payroll taxes, including unemployment insurance and state disability insurance. Upon successful registration with the EDD, businesses receive an eight-digit employer payroll tax account number, also known as a State Employer Identification Number (SEIN) or State ID number, which is used for all interactions with the department, such as filing payroll tax returns and wage reports.

Additionally, the California Department of Tax and Fee Administration (CDTFA) requires the FEIN for various tax and fee programs. This includes registering for a seller’s permit if your business sells tangible personal property, which is necessary for collecting and remitting sales and use tax.