What Is an EIN Number? Meaning, Who Needs One and How It Differs from SSN

An EIN, short for Employer Identification Number, is a nine-digit number the IRS gives to a business so it can be identified for tax purposes. It looks like 12-3456789. Think of it as a Social Security Number for a company. If you are forming a US LLC or corporation, you will be asked for it at the bank, by payment processors and on your tax forms.

What an EIN number is used for

• Opening a US business bank account.
• Filing the company's tax returns and IRS forms.
• Hiring employees and paying payroll tax.
• Applying for payment accounts such as Stripe or PayPal in the company's name.
• Applying for business licences and permits in many places.

Who needs an EIN

Almost every US company does: an LLC with more than one owner, a corporation, a partnership, and any business with employees. A single-member LLC owned by a US person can sometimes use its owner's SSN for taxes, but banks and payment providers still ask for an EIN, so most owners get one. A foreign-owned single-member LLC needs an EIN for its yearly IRS filing, as our Form 5472 guide explains.

EIN vs SSN vs ITIN

They are different numbers for different things. An EIN does not make you a US tax resident, and it does not let you work in the US. If you need a personal number, see our ITIN application service.

How much does an EIN cost?

The IRS issues it free of charge. Companies that prepare and submit the application for you charge a service fee. Be careful of sites that charge a fee for the IRS number itself or look like official IRS pages. Our EIN filing service is a paid service for preparing the application, and we say so.

How to get one

1. Form the company first. The IRS matches the EIN to a company that exists.
2. Apply with the exact legal name and address from the state record.
3. If you have an SSN or ITIN, you can usually apply online. If you do not, see how to get an EIN without an SSN.
4. Keep the IRS confirmation letter. Banks ask for it. If you lose it, read how to find your EIN number.

Common mistakes

• Applying before the state has approved the company.
• Using a name that does not match the state record exactly.
• Paying a third party to "buy" an EIN. It is free from the IRS.
• Sharing the EIN letter in public places. Treat it as sensitive.

What next

Once you have the EIN, open a bank account: see US business bank account for non-residents, and read EIN number for an LLC for the steps for LLC owners. Starting from scratch? See registering an LLC in the USA online. This is general information, not tax advice.