If you’re starting a small business, you may need to set up a tax ID number, also known as an employer identification number (EIN), with the IRS. This number is generally required of businesses that meet any of the following criteria:
- The business employs workers.
- It’s organized as a corporation or partnership.
- It withholds taxes on income, other than wages, that will be paid to a non-resident alien.
- It offers a Keogh plan.
- It’s a plan administrator, farmers’ cooperative, non-profit, real estate mortgage conduit, estate, or non-exempt trust.
- It must file excise, employment, or alcohol, tobacco, and firearms tax returns.
- It was obtained through a purchase or an inheritance.
How is an EIN used?
The IRS assigns EINs to businesses to match entities with their tax obligations. As a small business owner, you’ll use the unique number you’re assigned on every federal and state tax document you submit, but you’ll also use it to hire employees, open bank accounts, and apply for business licenses and permits.
How can I set up a tax ID number?
An owner, a partner, or a principal officer who can serve as a responsible party for the business can set up a tax ID number in one of the following four ways:
- Online: Visit irs.gov and complete the online application. This option is available to any entity whose principal business, office, or agency is located in the United States or one of its territories.
- Fax: Compete IRS Form SS-4 and remit it to the fax number that’s provided here.
- Mail: Download Form SS-4 and mail it to the address that’s provided here.
- Phone: Call (800) 829-4933 Monday through Friday between the hours of 7 a.m. and 10 p.m. Eastern Time and work through the process with a representative. International applicants should call (267) 941-1099 Monday through Friday between the hours of 6 a.m. and 11 p.m. Eastern Time.
Is there an application fee to set up a tax ID number?
No. This is a free service provided by the IRS.
Should I have anything prepared?
Yes. You’ll need a valid U.S. identification number, such as a social security number, and essential information about your business, including its address and legal structure. Applicants who don’t have a social security number may apply for an individual taxpayer identification number with Form W-7: IRS Application for Individual Taxpayer Identification Number and provide proof of their legal residence or visitor status in the United States.
If you plan to complete your application online or by phone, you may wish to complete a paper copy of the SS-4 form ahead of time to ensure you have all the information you need for a simple submission.
How quickly will I receive my number?
The speed usually depends on the method you use to apply for the tax ID number. In most cases, you can expect to receive your tax ID number according to the following timetable:
Expected timeframe for receipt
|Fax||Within four days of receipt||Return fax|
|Within four weeks of receipt||U.S. mail|
Do I need to set up a state tax ID number, too?
Many states require businesses to pay income tax, sales tax, and/or employment tax, and generally, those states require owners to attain a state tax ID number.
The requirements for attaining this number vary by state, but you can contact your state’s tax authority through the phone numbers or site links below to learn about your obligations and the steps you’ll need to take:
What else will I need to do?
If you have or plan to hire employees, you must register with the IRS Electronic Filing and Tax Payments System (EFTPS). This system will afford you the ability to make federal payroll tax payments, including federal unemployment taxes and FICA taxes for Social Security and Medicare and income tax payments.
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