A unique nine-digit number assigned by the Internal Revenue Service (IRS), the Employment Identification Number (EIN) is also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number (FTIN). When used for identification rather than employment tax reporting, it is usually referred to as a Taxpayer Identification Number (TIN). When used for the purposes of reporting employment taxes, it is usually referred to as an EIN. These numbers are used for tax administration and must not be used for any other purpose. For example, an EIN should not be used in tax lien auction or sales, lotteries, or for any other purposes not related to tax administration.
How an EIN is Used
An EIN is used to identify a business entity for various tax purposes, similar to how a Social Security Number (SSN) is used to identify individuals. Businesses use their EIN to file tax returns, hire employees, open bank accounts, and conduct other business-related activities.
- Business types that require an EIN: Sole proprietorships with employees (other than the owner), partnerships, corporations, limited liability companies (LLCs), trusts and estates, and non-profit organizations.
How to Obtain an EIN
To obtain an EIN, a business can apply online through the IRS website, by mail, by fax, or by telephone (for international applicants). The process is generally quick and straightforward, and obtaining an EIN is inexpensive.
Restrictions on EIN Use
An EIN must not be used for any purpose other than tax administration. For example, an EIN should not be used in tax lien auction or sales, lotteries, or for any other purposes not related to tax administration.
