An EIN stands for Employer Identification Number and it is issued by the IRS to business entities, such as an LLC.
Even though it’s called an Employer Identification Number, it doesn’t mean that you have to have employees. The EIN is just a type of Taxpayer Identification Number (TIN) that identifies your LLC with the IRS.
An easy way to think of an EIN is that it’s like a “social security number” for your LLC.
An EIN is similar to a social security number in that it has 9 digits.
To differentiate an EIN from an SSN (123-45-6789), there are 2 digits followed by a hyphen and then 7 more digits (ex: 12-3456789).
An LLC’s EIN has many different names, but they all mean the same thing:
- EIN Number
- Employer ID Number
- Employer Identification Number
- Federal Employer ID Number
- Federal Employer Identification Number
- Federal Tax Number
- Federal Tax ID Number
- Federal Tax Identification Number
What is an LLC’s EIN Number used for?
EIN Numbers are used for:
- All correspondence with the IRS
- Deposits and payments for federal taxes
- Opening an LLC business bank account (checking, savings, or investment accounts)
- Filing tax return and other documents (federal, state, and local)
- Handling employee payroll (if applicable)
- Obtaining business lines of credit or business loans
- Obtaining credit cards in the name of the LLC
- Applying for business licenses
Wait for LLC Approval
Wait for your LLC to be approved by the state before applying for your EIN. Otherwise, if your LLC filing is rejected, you’ll have an EIN attached to a non-existent LLC.
Exception to the rule:
If you are forming a Louisiana LLC or a West Virginia LLC, things are a little backwards (make sure to follow our lessons step-by-step). You’ll need to confirm your LLC name availability first, then get your EIN from the IRS, and then file your Articles of Organization with the state.
Applying for an EIN for your LLC is free ($0)
Applying for an EIN for your LLC is completely free.
The IRS doesn’t charge anything for applying for an EIN.
Don’t have an SSN or ITIN?
I made a mistake in the video above. I said: “If you are a foreign national you will need to use your ITIN. If you don’t have your ITIN, you will first need to apply for your ITIN before applying for your EIN.” This is not true.
Apologies for the confusion. We now have better information from the IRS about how to get an EIN without an SSN or without an ITIN.
If you have a foreign-owned LLC, you can still get an EIN without an SSN or ITIN. You just can’t apply for your EIN online. Instead, you’ll need to mail or fax Form SS-4 to the IRS. We have instructions here: How to Apply for EIN without an SSN or ITIN.
EIN Phone Application
Note: The video above also explains how you can get an EIN by phone. This is no longer the case. The IRS has discontinued this service.
The only businesses that can get an EIN by phone are Exempt Organizations (like non-profits) and Foreign Companies (companies formed or organized outside of the United States).
EIN for Husband and Wife LLC
If you have a 2-member LLC owned by husband and wife, and are located in a community property state, you can elect a special form of taxation called a “Qualified Joint Venture LLC“.
A Qualified Joint Venture with the IRS allows your husband and wife LLC to file taxes as a Sole Proprietorship instead of a Partnership. This can save you time and money in accounting and tax costs.
There may be additional benefits to obtaining Qualified Joint Venture status with the IRS and this is a conversation you’ll want to have with an accountant.
Please see our full article here: Qualified Joint Venture (Husband and Wife LLC)
EIN Responsible Party for LLC
The EIN Responsible Party is the person that goes on file with the IRS when you apply for an EIN for your LLC.
Think of the Responsible Party as the LLC’s “contact person”. This is the person the IRS will send mail and correspondence to.
If you have a Single-Member LLC:
You will be the EIN Responsible Party.
If you have a Multi-Member LLC:
One of the LLC Members will be the EIN Responsible Party.
The IRS just wants one EIN Responsible Party. They don’t want all the LLC Members information. The IRS gets the other Members’ information when you file your 1065 Partnership return and issue K-1s each year.
Although any LLC Member can be listed, the person listed will take on the responsibility of making sure the LLC’s taxes are handled properly.
If your LLC is owned by another company:
The IRS made changes in 2018 that no longer allow an EIN Responsible Party to be a company. The EIN Responsible Party must be an individual person. So it’s best to list one of the individual owners of the parent company.
Note: If you have an LLC that is owned by another company and you try to get an EIN online, you’ll just get an error message at the end of the application.
To learn more about who can be the EIN Responsible Party for your LLC, please see EIN Responsible Party for LLC.
LLC taxed as a Corporation
By default, an LLC is taxed based on the number of Members (owners).
And “by default” means the LLC doesn’t elect to be taxed as a Corporation (either a C-Corporation or an S-Corporation). Instead, the LLC is just taxed in its default status.
(related article: how are LLCs taxed)
The default tax status for a Single-Member LLC is a Disregarded Entity, meaning if the LLC is owned by an individual, the LLC is taxed like a Sole Proprietorship. If the LLC is owned by a company, it is taxed as a branch/division of the parent company.
The default tax status for a Multi-Member LLC is Partnership, meaning the IRS taxes the LLC like a Partnership.
If instead, you want your LLC to be taxed as a C-Corporation, you’ll first apply for an EIN and then later file Form 8832.
If you want your LLC taxed as an S-Corporation, you’ll first apply for an EIN and then later file Form 2553.
If you choose to have your LLC taxed as a C-Corporation, make sure you speak with an accountant as there are a lot of details you need to consider. Having an LLC taxed as an S-Corporation is a much more popular choice than having an LLC taxed as a C-Corporation. S-Corporation taxation usually makes sense once an LLC generates about $70,000 in net income per year.
How to apply for an EIN for your LLC
Below you will find 3 different sets of instructions:
1. If you have an SSN or ITIN, use the online EIN application
We recommend applying for an EIN online for your LLC if you have an SSN or ITIN.
This is the easiest filing method and has the fastest approval time.
We have instructions here:
How to apply for an EIN online
2. If you apply for an EIN online, but you get an error message
If you have an SSN or ITIN, apply for an EIN online, but you get an error message (called a reference number) at the end, you will need to mail or fax Form SS-4 to the IRS instead.
We have instructions here:
Apply for EIN for LLC with Form SS-4
3. If you don’t have an SSN or ITIN
If you don’t have an SSN or ITIN, you can still get an EIN for your LLC. You just can’t apply for an EIN online.
You will need to mail or fax Form SS-4 to the IRS. You must also fill the form out a certain way (on line 7b) in order to have your EIN approved.
We have instructions here:
How to get an EIN without an SSN or an ITIN
EIN Confirmation Letter (EIN Approval)
Once the IRS issues an EIN for your LLC you will receive your official approval, known as an EIN Confirmation Letter (CP 575).
The method in which you applied for an EIN will determine how you receive your EIN Confirmation Letter.
If you apply for an EIN online:
You’ll be able to download a PDF copy of your EIN Confirmation Letter at the end of the online application. There is no waiting time. The IRS will also send you a duplicate copy in the mail in about 4 to 5 weeks.
If you send Form SS-4 by fax:
The IRS will fax you back your EIN Confirmation Letter within 4 to 7 business days.
If you send Form SS-4 by mail:
The IRS will mail your EIN Confirmation Letter within 4 to 8 weeks.
Here is what the EIN Confirmation Letter for an LLC looks like:
How to Cancel an EIN?
If there was a mistake with your first EIN application or you need to cancel your EIN Number for any reason, you just need to mail a cancellation letter to the IRS.
We have instructions here: how to cancel an EIN.
You don’t have to wait for your EIN cancellation to be finalized before getting a new EIN for your LLC.
LLC Business Bank Account
After getting your EIN, you can then open a separate business bank account for your LLC.
Banks usually ask for the following documents to open an LLC business bank account:
- EIN Confirmation Letter
- LLC Approval (stamped and approved Articles of Organization, Certificate of Organization, or Certificate of Formation)
- LLC Operating Agreement
- Driver’s License and/or Passport
Aside from the above, banks may also require other paperwork (like proof of address), so we recommend calling a few banks ahead of time before going in. It’s also a good idea to ask if they have monthly fees on their “basic” business checking accounts. There are a number of banks that don’t have monthly fees.
If you’re a non-US resident (foreigner), you will need to show 2 forms of identification, such as your foreign passport and your foreign driver’s license. There are additional things (shown below) to keep in mind when opening a U.S. bank account for your LLC: Non-US resident opening U.S. bank account for an LLC
IRS Contact Information
If you have any questions, you can call the IRS at 1-800-829-4933. Their office hours are 7am – 7pm local time, Monday through Friday.
We recommend you call the IRS early to avoid the typically long holding times.