What is an EIN and who needs one

An employer identification number, or EIN, is the nine-digit number the IRS uses to identify a business. Despite the name, you do not need employees to need one. This guide explains who must have an EIN and who can manage without.

By Hamza Fida, Chartered Accountant. Reviewed by Mirza Fahad Baig, Chartered Accountant. Checked against official sources on . 3 minute read.

Short answer

An EIN, or employer identification number, is a free nine-digit IRS tax number for a business, written 12-3456789. You need one to hire employees, run a partnership or corporation, or pay certain federal taxes, and a foreign-owned single-member LLC needs one to file Form 5472. Banks usually ask for one.

At a glance

What it is
A federal tax ID for a business, issued by the IRS
Format
Nine digits, written 12-3456789
Cost
Free from the IRS
How long it lasts
It is permanent and stays with the business
Needed by
Businesses with employees, partnerships, corporations and several others
Also asked for by
Banks, payment platforms and state tax agencies
What is an EIN and who needs oneWhat it is: A federal tax ID for a business, issued by the IRS; Format: Nine digits, written 12-3456789; Cost: Free from the IRS; How long it lasts: It is permanent and stays with the business; Needed by: Businesses with employees, partnerships, corporations and several others; Also asked for by: Banks, payment platforms and state tax agencies.KEY FACTS AT A GLANCEWhat is an EIN and who needs oneWhat it isA federal tax ID for abusiness, issued by theIRSFormatNine digits, written12-3456789CostFree from the IRSHow long it lastsIt is permanent and stayswith the businessNeeded byBusinesses with employees,partnerships, corporationsand several othersAlso asked for byBanks, payment platformsand state tax agenciesChecked against official sourcesTax BakersWhat is an EIN and who needs oneWhat it is: A federal tax ID for a business, issued by the IRS; Format: Nine digits, written 12-3456789; Cost: Free from the IRS; How long it lasts: It is permanent and stays with the business; Needed by: Businesses with employees, partnerships, corporations and several others; Also asked for by: Banks, payment platforms and state tax agencies.KEY FACTS AT A GLANCEWhat is an EIN and who needs oneWhat it isA federal tax ID for a business, issued bythe IRSFormatNine digits, written 12-3456789CostFree from the IRSHow long it lastsIt is permanent and stays with the businessNeeded byBusinesses with employees, partnerships,corporations and several othersAlso asked for byBanks, payment platforms and state taxagenciesChecked against official sourcesTax Bakers
Key facts at a glance, as set out in this guide.

What an EIN is

An EIN is a federal taxpayer identification number for a business or other organization. It does for a business what a Social Security number does for a person in the tax system: it appears on the business's tax returns, payroll filings and information returns, and it is what banks and customers use to identify the business for tax reporting.

It is nine digits long and written in the format 12-3456789. The IRS issues it free of charge, and warns that you never have to pay a fee for one. Once issued, it belongs to that business permanently.

Who needs one

The IRS says a business generally needs an EIN to:

  • hire employees,
  • operate as a partnership or corporation,
  • pay sales and excise taxes,
  • change its business structure or ownership, or
  • administer certain trusts, retirement plans and estates.

In practice that means every multi-member LLC, which the IRS taxes as a partnership by default, and every corporation needs one from the start.

Two other groups also need an EIN:

  • A single-member LLC owned by a foreign person. It must have an EIN to file Form 5472 with its pro forma Form 1120. See our Form 5472 guide.
  • Any LLC that elects to be taxed as a corporation.

Single-member LLCs owned by US persons

A single-member LLC owned by a US individual, with no employees and no excise tax to pay, reports its profit on the owner's own return and may not strictly need an EIN for income tax. Most owners get one anyway, for three reasons:

  • banks usually require it to open a business account,
  • it lets you give clients and platforms the business number instead of your Social Security number, and
  • you will need it the day you hire someone.

The full rules are in does a single-member LLC need an EIN.

What an EIN is not

  • It is not a state tax number. States issue their own numbers for sales tax and payroll.
  • It is not a business license or proof that the company exists. The state formation document is the proof.
  • It is not a personal tax number. An individual who needs a US tax number and cannot get a Social Security number applies for an ITIN instead. See EIN vs ITIN vs SSN.

An EIN cannot be cancelled, but its account can be closed. See how to close your EIN account, and for changes that need a new number, when you need a new EIN.

How to get one

Form the company with the state first, then apply. Timing is covered in how long it takes to get an EIN. If the person in control of the business has a Social Security number or ITIN and the business is based in the US, the IRS online application issues the EIN immediately. See how to get an EIN online. Owners abroad without either number apply on Form SS-4 by fax, mail or phone. See how to get an EIN without an SSN or ITIN.

Need an EIN for your company?

We apply for the EIN as part of forming your company, including for owners without a Social Security number.

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Questions people ask

Is an EIN the same as a tax ID number?

An EIN is one kind of taxpayer identification number, the kind issued to businesses. Social Security numbers and ITINs are the kinds issued to individuals.

Does an EIN expire?

No. It is a permanent number for that business, even if the business stops filing for a time.

Do I need an EIN for a single-member LLC?

If the LLC has employees, owes excise taxes, is owned by a foreign person, or elects corporate tax treatment, yes. Otherwise it may not be strictly required, but most banks ask for one.

How much does an EIN cost?

Nothing. The IRS issues EINs free of charge.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IRS: Get an employer identification number
  2. IRS: Employer identification number
  3. IRS: Instructions for Form 5472 (Rev. December 2024)

Rules and fees change. If you are reading this long after September 30, 2026, confirm the figures with the source before you rely on them.

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This guide is general information. It is not tax or legal advice for your situation.