What Is an SEIN and How to Apply for One?

An Employer Identification Number (EIN), also known as a federal tax identification number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity. This number serves as a permanent identifier for tax purposes, much like a Social Security Number (SSN) identifies an individual. Obtaining an EIN is a fundamental step for many businesses, enabling them to comply with federal tax obligations and establish their identity with the federal government.

Understanding the EIN

The EIN functions as a business’s primary identifier for federal tax purposes, distinguishing it from its owners or individuals. Businesses use this number when filing various federal tax returns, including income tax returns, employment tax returns (such as Form 941 for employer’s quarterly federal tax), and excise tax returns. It is also required for opening a business bank account, applying for business licenses and permits, and establishing business credit. This unique identifier ensures proper tracking of a business’s financial activities and tax compliance with the IRS.

Entities That Require an EIN

Any business that pays wages to employees must have an EIN to report payroll taxes. Corporations, including both S corporations and C corporations, are also required to obtain an EIN regardless of whether they have employees. Partnerships, whether general partnerships, limited partnerships, or limited liability partnerships, must also secure an EIN.

Multi-member Limited Liability Companies (LLCs) are generally treated as partnerships for federal tax purposes and therefore need an EIN, even if they do not have employees. Non-profit organizations, which often seek tax-exempt status under Internal Revenue Code Section 501(c)(3), must obtain an EIN to apply for and maintain their tax-exempt status. Certain types of trusts and estates also require an EIN. Furthermore, any business that files specific excise tax returns, such as those related to fuel or environmental taxes, must possess an EIN. Sole proprietorships, while not typically needing an EIN initially, must obtain one if they hire employees or file for bankruptcy.

Applying for an EIN

Obtaining an EIN involves a straightforward application process. The most common and often quickest method for eligible applicants is to apply online through the IRS website, which typically provides the EIN immediately upon completion of the application. The online application is available for businesses located within the United States or U.S. territories. The applicant must be an individual with a valid Taxpayer Identification Number, such as an SSN or an Individual Taxpayer Identification Number (ITIN), who is the responsible party for the entity.

Applicants can also apply for an EIN by faxing a completed Form SS-4 to the IRS. For fax applications, the processing time can range from a few business days to a week. Mailing the Form SS-4 is another option, though this method has the longest processing time, typically taking several weeks to receive the EIN. The form requires specific details, including the legal name of the entity, its mailing address, the type of entity, and the reason for applying, such as starting a new business or hiring employees.

A telephone application is available for international applicants who do not have a U.S. address or those who prefer to speak with an IRS representative. This method requires the applicant to be authorized to receive the EIN and have all necessary information readily available. Regardless of the chosen method, the information provided on Form SS-4 must be accurate and complete to avoid delays in receiving the EIN.