What Is an EIN? The Complete Guide to Employer Identification Numbers

An Employer Identification Number (EIN) — also called a Federal Tax Identification Number or FEIN — is a unique nine-digit number assigned by the Internal Revenue Service to identify a business entity. The format is XX-XXXXXXX (two digits, a hyphen, then seven digits).

Your EIN is used for filing business tax returns, opening business bank accounts, hiring employees, applying for business credit and loans, and completing required tax documents like W-2s and 1099s. It is the primary way the IRS tracks your business's tax obligations.

Importantly, having an EIN means you do not need to give your personal Social Security Number to clients, vendors, or financial institutions for business purposes. This adds a layer of privacy and protection against identity theft.

Your LLC definitely needs an EIN if: it has more than one member (multi-member LLC), it has or plans to have employees, it files excise tax returns, or it withholds taxes on income paid to a non-resident alien.

Your single-member LLC can technically use your personal SSN instead of an EIN if it has no employees. However, getting an EIN is strongly recommended even if not required because: (1) banks typically require an EIN to open a business bank account, (2) using your SSN on business forms exposes it to more people, increasing identity theft risk, (3) getting an EIN is completely free and takes only a few minutes, and (4) if you ever hire employees or add members, you will need one anyway.

The bottom line: every LLC should get an EIN. There is no cost, minimal effort, and significant benefits. There is no good reason not to.

The IRS offers a free online EIN application at irs.gov. The process takes about 5-10 minutes, and you receive your EIN immediately upon completion. The online application is available Monday through Friday, 7:00 AM to 10:00 PM Eastern Time.

To apply, you will need: your LLC's legal name (exactly as it appears on your Articles of Organization), your LLC's physical address, the state and date of formation, the name and SSN (or ITIN) of the "responsible party" (the individual who controls or manages the LLC), and the type of LLC (single-member or multi-member).

After receiving your EIN, the IRS will mail a confirmation letter (CP 575) to the address on your application within 4-6 weeks. Save this letter — it is the official confirmation of your EIN. You can use the EIN immediately; you do not need to wait for the letter.

Important: Do not pay anyone to obtain your EIN. Some services charge $50-$150 for EIN applications, but this is a free service directly from the IRS. The only reason to use a service is convenience — FormifyAI includes EIN procurement at no additional cost as part of the formation process.

Paying for a free service: The IRS does not charge for EINs. Any service charging you for EIN procurement is reselling a free government service. Apply directly at irs.gov or use a formation service like FormifyAI that includes it at no additional cost.

Applying before your LLC is formed: You need an active, state-approved LLC before you can get an EIN. The IRS requires your LLC's legal name and formation date. Apply for your EIN after your state approves your LLC formation.

Using the wrong entity type: When applying, select "Limited Liability Company" as your entity type. The IRS will ask how your LLC is classified for tax purposes (disregarded entity, partnership, or corporation). Choose based on your tax election, not your entity type.

Not saving your confirmation: The IRS issues a CP 575 confirmation letter that serves as the official record of your EIN. Save this document carefully. If you lose it, you can call the IRS Business & Specialty Tax Line to retrieve your EIN, but it can be a time-consuming process.

Applying for multiple EINs: Each LLC needs only one EIN. Do not apply for a new EIN when you change your LLC's name, address, or members — you only need a new EIN in very specific circumstances (like certain structural changes). Your original EIN stays with your LLC for its entire existence.

Open a business bank account: With your EIN and Articles of Organization, you can open a dedicated business bank account. This is essential for maintaining the separation between personal and business finances that protects your LLC's liability shield.

Set up accounting: Use your EIN to establish your business accounting system. Whether you use software like QuickBooks, Xero, or Wave, or work with a bookkeeper, having your EIN from day one keeps your records clean.

Register for state and local taxes: If your business will collect sales tax, you will need to register for a sales tax permit with your state's tax authority. Your EIN is typically required for this registration.

File required forms: If you pay contractors more than $600 in a year, you will need to file Form 1099-NEC with the IRS using your EIN. If you have employees, your EIN is used on W-2s, quarterly payroll tax returns, and annual unemployment tax returns.