How to Get an EIN Number for Your Business

Getting an EIN is a necessary step when starting any business entity. The Internal Revenue Service (IRS) assigns this unique nine-digit number as an identifier for tax and legal purposes. Besides compliance with tax and employment regulations, the number also opens the door for several other important business functions, such as opening a business bank account and obtaining permits or licenses.

The good news is that the application process is not terribly complicated—as long as you have all your documentation ready. To help you simplify the process, we’ll discuss how to get an Employer Identification Number (EIN) for your business with easy, step-by-step guidance.

How to Get an EIN, Step-by-Step

To apply for an EIN when starting a business, you need to complete and submit Form SS-4, available on the IRS website. The following steps will help to ensure a smooth and painless application process.

Step 1: Determine if Your Business Qualifies for an EIN

Before you embark on the application journey, first determine if or why you need an EIN.

Other reasons you may need to get an EIN for your business include:

• Opening a business bank account
• Applying for a business loan
• Obtaining permits or licenses
• Protecting your personal assets in the case of bankruptcy
• Building business credit

Step 2: Gather the Required Information

Before beginning your application, gather all the information you will need to fill out Form SS-4 to expedite the process. Also, if you apply online, you will only have 15 minutes to complete the form before your screen times out—having all the details ready will prevent this from happening.

To fill out your form, you will need the following information on hand:

Step 3: Explore the Application Submission Methods and Procedures

You can either submit your application online, through phone, via fax, or by mail. The method you choose to submit your application will have an impact on how long it takes to obtain your EIN. Keep in mind that any mistakes or omissions can lead to delays or rejection of your application.

Should you choose to mail your application—the most traditional method—you’ll need to print and complete Form SS-4 and send it to the appropriate address provided on the IRS website. Make sure to include any additional required business documentation with the form.

Processing time by the IRS is a minimum of four weeks; this is the slowest and most time-consuming approach to applying for an EIN. Additionally, your personal information is at risk of being stolen.

Applying online on the IRS website is the fastest and most convenient application method. The application is validated immediately. Generally, you will receive your EIN on the very same day via email. However, as mentioned earlier, there is a time limit—so make sure you have all your information sorted from the start.

To begin, you’ll complete Form SS-4 and fax it to the relevant IRS department depending on your location (details are provided on the IRS website), along with any additional required business documentation. If you provide your fax number, you should receive your new EIN via fax within four business days.

Only international applicants may apply for an EIN over the phone. The individual making the call must answer questions in line with Form SS-4 and be authorized to receive the EIN. An IRS representative will process the required information and assign you an EIN after establishing your account.

Step 4: EIN Application Fees and Costs

The IRS does not charge a fee to apply for or obtain an EIN. Therefore, if you take care of filing everything yourself, you won’t pay anything.

However, some business owners may choose to hire a third party to complete their EIN application as part of a business service. These services can cost between $50 and $300—although the application itself still carries no fee. While most applicants don’t require the assistance of a third party, it can be helpful for businesses with numerous responsible parties who need an EIN.

Employer Obligations That Come With an EIN

When you obtain an EIN for your business, it comes with certain obligations that must be fulfilled. Once you have an EIN, you’re registered with the federal government. Therefore, it’s essential that you submit precise tax returns and fulfill any tax payments on schedule to stay in good standing. This includes payroll taxes, withholding and remitting FICA (Medicare), income tax, and FUTA (unemployment) taxes.

Employers are also required to verify employees’ identification and eligibility to work in the U.S. Employers with an EIN must complete and store a copy of Form I-9 (Employment Eligibility Verification) for each employee they hire.

In addition to these responsibilities, employers with an EIN must comply with a range of federal employment regulations, including but not limited to:

• Fair Labor Standards Act (especially regarding minimum wage—as well as state and municipal minimum wage ordinances—and overtime pay)
• Child labor standards
• Family and Medical Leave Act (FMLA) for unpaid, job-protected leave
• Americans with Disabilities Act (ADA) for disability discrimination prevention

Understanding and following these regulations ensures fair treatment of employees and protects employers from legal issues. Staying on top of the current legislature not only helps with legal compliance but also creates a socially responsible workplace where your employees will love to work.

The Role of Your EIN in Business-Bank Relationships

To grant you a business account, a bank must verify your organization’s identity and the nature of your business. Depending on the financial institution, having an EIN may be mandatory. Much like how your Social Security number (SSN) proves your existence tax-wise, your EIN proves your business’ existence and shows that you are legally compliant.

Also, to start receiving credit cards, debit cards, and other electronic payments from customers or clients, you will need a merchant account, which is a type of business account. The bottom line is to accept card payments from clients, you’ll need to get an EIN for your business.

The Relationship Between EIN and Loan Applications

Although having an EIN serves as verification to lenders that you are legally compliant and have the required credentials to run your business, it does not guarantee a loan, nor keep you from having to hinge your loan eligibility on your personal credit score.

When applying for a loan, lenders generally ask for proof of business ownership, income, equity, and a business bank account. They will also require the owner or applicant’s SSN and proof of residency, among other information.

Obtaining Your EIN: Navigate the Process With Confidence

When you understand how to get an EIN number for your business, you not only improve your organization’s compliance but also open many doors to grow your business. For example, with an EIN in hand, you can start applying for bank accounts, permits, and loans—and finally start accepting payments from customers.

Of course, in order to receive payments, you’ll need a payment processor. That’s where a merchant service provider can help. Once you have your EIN, they’ll find the perfect credit card processing solution for your business, no matter your size or budget. A dedicated account manager will assist you with every step—from application to setup and everything in between.