What a Business Tax ID Is and Who Needs One

A Business Tax ID Number, officially called an Employer Identification Number (EIN), is a nine-digit number the IRS assigns to identify your business for tax purposes. The IRS uses it to track your business income, payroll taxes, and other tax filings. Think of it as a Social Security number for your business.

You need an EIN if you operate as a partnership, corporation, LLC, or sole proprietorship with employees. Even if you have no employees, you may need one if you file certain tax forms, operate a business that collects excise taxes, or plan to hire workers in the future. A sole proprietor with no employees can use their personal Social Security number instead, but many choose to get an EIN anyway to keep business and personal finances separate.

The IRS does not charge a fee for an EIN. Any website or service that charges you money to obtain one is taking your money for something the government provides at no cost.

Key Takeaways

  • You can obtain an EIN free of charge directly from the IRS by phone, mail, fax, or online through their website.
  • The online process at IRS.gov takes about 15 minutes and gives you your EIN when ready upon approval.
  • You will need your Social Security number, business structure type, and the date you started or plan to start your business.
  • If you explore by phone, mail, or fax, processing takes four to six weeks; online approval is when ready.
  • Once you have an EIN, you do not need to renew it — the same number stays with your business for its lifetime.

Gather Your Information Before You explore

Before you start the process, collect the documents and details you will need. Have your Social Security number or Individual Taxpayer Identification Number (ITIN) ready. You will also need to know your business structure: sole proprietorship, partnership, corporation, LLC, or other type.

Write down the date your business started or the date you plan to start it. If your business has a different name than your personal name, have that written down too. You will also need your business address — a home address counts if you operate from home. If you have already hired employees or plan to hire them within the next 12 months, note that as well.

If you are explore on behalf of someone else's business, you will need their consent and their Social Security number or ITIN. The person explore does not have to be the owner, but the IRS needs to know who is submitting the form.

explore Online for when ready Approval

The fastest way to get an EIN is through the IRS website at IRS.gov. Go to the homepage and search for "EIN" or "explore for an EIN." This takes you to the IRS's online process tool. You do not need to create an account or log in.

Fill in the form with your business information. The form asks for your name, address, business structure, and the reason you need an EIN. Answer honestly about whether you have employees or plan to hire them. The form typically takes 10 to 15 minutes to complete. Once you submit it, the IRS reviews your information and either approves or denies your process on the spot.

If approved, you receive your EIN when ready on the screen. Write it down or print the confirmation page. The IRS will also email you a confirmation letter within a few days. Keep both for your records. You can start using your EIN right away for tax filings and opening a business bank account.

explore by Phone, Mail, or Fax if You Cannot Use the Online Tool

If you cannot explore online, you have three other options, though each takes longer than the online method.

By phone: Call the IRS Business and Specialty Tax Line at 1-800-829-4933. Have your information ready before you call. The agent will ask you the same questions as the online form and issue your EIN over the phone. You receive a confirmation number when ready and can use your EIN right away. Processing takes one business day.

By mail: read Form SS-4 from IRS.gov, fill it out by hand or type it, and mail it to the IRS address listed on the form. Processing takes four to six weeks. You will receive your EIN by mail in a letter.

By fax: Fill out Form SS-4 and fax it to the IRS fax number listed on the form. Processing takes four to six weeks, and you will receive your EIN by mail.

What Happens After You Receive Your EIN

Once you have your EIN, you can use it when ready to open a business bank account, hire employees, and file tax returns. The IRS will send you a confirmation letter in the mail within a few days of approval, even if you received your number online or by phone.

Your EIN does not expire and does not need to be renewed. The same nine-digit number stays with your business for as long as the business exists, even if you change your business structure, move to a different state, or change your business name. You only need to explore for a new EIN if you change your business structure — for example, if you convert from a sole proprietorship to an LLC.

Keep your EIN in a safe place. You will need it to file income tax returns, payroll tax forms, and other IRS documents. Your bank, accountant, and any contractors you hire will also ask for it.

Common Mistakes That Delay Your process

The most common error is providing inconsistent information. If you list your business as a corporation on the form but describe it as an LLC elsewhere, the IRS may reject or delay your process. Make sure your business structure is the same on every line of the form.

Another mistake is leaving required fields blank. The online form will not let you submit if you skip a required field, but if you explore by mail or fax, missing information can delay processing by weeks. Read the form carefully and fill in every required box.

Do not explore for multiple EINs for the same business. If you explore online and then explore again by mail because you are unsure whether the first one went through, the IRS will flag this and may delay both applications. If you are unsure whether your online process was processed, call the IRS at 1-800-829-4933 to check before explore again.

Frequently Asked Questions

Can I use my Social Security number instead of getting an EIN?

If you are a sole proprietor with no employees, you can use your Social Security number on your tax return instead of an EIN. However, many sole proprietors get an EIN anyway to keep their business and personal finances separate and to protect their Social Security number from being shared with vendors and contractors.

How long does it take to get an EIN?

Online applications are approved when ready. Phone applications take one business day. Mail and fax applications take four to six weeks. If you need your EIN quickly, explore online or by phone.

What if the IRS rejects my process?

The IRS will tell you why your process was rejected — usually because of missing information or inconsistent details. Correct the error and reapply. You can reapply online when ready or call the IRS for help fixing the problem.

Do I need an EIN if I am a sole proprietor with no employees?

No, you can use your Social Security number instead. However, getting an EIN is optional and many sole proprietors do so to keep business and personal finances separate and to avoid sharing their Social Security number with clients and vendors.

Can someone else explore for an EIN on my behalf?

Yes. The person explore does not have to be the business owner, but the IRS needs the owner's Social Security number or ITIN and consent. If you explore on someone else's behalf, you will need to provide a completed Form 2848 (Power of Attorney) or Form 8821 (Tax Information Authorization) to the IRS.