- Step 1: Know If You Are Eligible
- Step 2: Understand the EIN Online Application Process
- Step 3: Submit the Application
- Documents Required to Apply for EIN
EIN, or Employer Identification Number, is a Federal Tax Identification Number that is essential for business entities to facilitate identification by the Internal Revenue Service (IRS). The 9-digit number is primarily used to report taxes and allows businesses to maintain a separate legal entity and secure personal finances. Whether you are forming a corporation in the U.S., an LLC, or a trust, you must obtain an Employer Identification Number for seamless tax reporting and business operations.
Businesses of all sizes and across all industries must get an Employer Identification Number. Applying for an EIN is free and you can have the same immediately. And now IRS makes it simpler to apply for an EIN. Let’s understand how you can apply for an Employer Identification Number online.
Step 1: Know If You Are Eligible
Corporations or LLCs with their principal business in the United States or any U.S. territory can apply for an Employer Identification Number online. The person applying for the federal identification number must hold a valid Taxpayer Identification Number, including ITIN, SSN, or EIN. Only one responsible party per day is limited to one EIN. With “responsible party,” IRS defines a person who owns and controls the business entity or who exercises effective control over it. The responsible person should be an individual, and not an entity unless the application is made by a government entity.
Step 2: Understand the EIN Online Application Process
There are certain guidelines that you need to follow when filing the EIN online. To apply, you need to visit the official website of the IRS. The application must be completed in one session because you cannot save the application or return to it at a later time. The session will automatically expire after 15 minutes of inactivity and you will be logged out. In that case, you will need to need to start over with the application process again.
Immediately after completing the verification, you will receive the EIN. To receive the EIN confirmation letter online, you will first need to install Adobe Reader on your computer system before you begin the application process.
Step 3: Submit the Application
Once you have completed the application and all validations are made as per IRS, you need to submit it online. Remember, this needs to be done in one session. So, it is important to be careful and provide the information correctly when filling up the application online. After complete validation, you will receive the EIN immediately, which you can save, download, and print.
For the application process, you must fill out Form SS-4, the Application for Employer Identification Number. It is available on the official website of the IRS. You need to provide the following information on the application to receive an Employer Identification Number:
- The principal officer, owner, trustor, partner, or other title holder of the company
- Personal taxpayer identification number of the applicant
- The type of entity, i.e., whether you are a sole proprietorship business, corporation, partnership, estate, trust, LLC, or any other type of entity
- The start date of the company or the date of acquisition
- The principal industry under whose purview the business falls into
- The reason to apply for EIN – change of organization, setting up a new business, IRS withholding compliance requirements, etc.
In addition to the above information, you also need to provide your business location, i.e., the business address and mailing address. You must also provide the name of the business, which state and county is it located, and the date of formation.
Apart from applying online, you can also file the application via mail, telephone, or fax.
Documents Required to Apply for EIN
To apply for EIN, you would also need to submit a few important documents online. These include:
- PAN card and proof of identity of the proprietor of the entity, or the applicant
- Proof of address of the business entity you are filing the application for
- Proof of address of the proprietor or the applicant
- Passport-sized photo of the applicant or the business proprietor
- References
If your organization is eligible for tax exemption status, ensure it is legally formed before you can apply for an Employer Identification Number. Most organizations that are tax-exempt under IRC 501(a) are automatically subject to revocation of their tax-exempt status if they cannot file annual information returns for three consecutive years. When filing an EIN, it is considered that your organization is formed legally and you are already on this 3-year period.
To understand the intricacies of filing an EIN, you can consult an experienced business attorney.
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