(a) What is EIN : An Employer Identification Number (EIN) is a nine-digit social security number (SSN) for your company also known as a Federal Tax Identification Number issued by the IRS used to identify a business entity. Generally, businesses need an EIN.
After forming a USA corporation or LLC (limited liability company), the next step is to get an EIN.
(b) Who needs EIN :The Federal Tax ID Number is necessary for an LLC or Corporation to lawfully conduct business activities, especially if you’re operating a business in the United States.
All U.S. companies are required to apply for an EIN when they open a U.S. bank account, obtain loans, hire employees, file taxes and may be required for obtaining business licenses and permits.(c)Validity of EIN : The EIN is valid for the life of the company. However, if your business changes its entity type (for example, it changes from an LLC to a corporation), a new Federal Tax ID Number is typically required.
FAQ’S Related to EIN :
Q1. When can I use my Internet EIN to make tax payments or file returns?
Answer. This EIN is your permanent number and can be used immediately for most of your business needs, including:
- Opening a bank account
- Applying for business licenses
- Filing a tax return by mail
It takes 2 weeks before your EIN becomes part of the IRS’s permanent records.
Q 2. The legal name of my business includes the symbol for a dollar sign ($). Does the IRS accept symbols as part of a business name?
A. No. The only characters IRS systems can accept in a business name are 1) alpha (A-Z), 2) numeric (0-9), 3) hyphen (-), and 4) ampersand (&). If the legal name of your business includes anything other than those listed above, you will need to decide how best to enter your business name into the online EIN application. Following are some suggestions:
| If your legal name contains: | Then: |
| A symbol or character, such as a “plus” symbol (+), “at” symbol (@), or a period (.) | 1) Spell out the symbol or 2) drop the symbol and leave a space. Example: If the legal name of your business is Jones.Com, then input it as Jones Dot Com or Jones Com |
| Backward (\) or forward (/) slash | Substitute a hyphen (-) |
| Apostrophe (‘) | Drop the apostrophe and do not leave a space. |
Q 3. What do I do if my entire address does not fit on your address line on the application?
A. IRS systems only allow 35 characters on the street address line. If your address does not fit in 35 characters, please make sure you provide the most essential address information (i.e., apartment numbers, suite numbers, etc). We’ll then validate the address you’ve provided with the United States Postal Service’s database and offer you an opportunity to make any changes to the address, if necessary.
Q 4. Are any entity types excluded from applying for an EIN over the Internet?
A. Yes. If you were incorporated outside of the United States or the U.S. territories, you cannot apply for an EIN online. i.e. Non Residents out of the US.
If you do not have a U.S. Address or U.S. Social Security Number, you will be required to provide a copy of the passport or government-issued ID for the person listed as the “responsible party” after submitting your EIN order.
All customers whose principal business, office or agency, or legal residence (in the case of an individual) is located in the United States or one of the U.S. Territories can apply for an EIN online. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) to use the online application. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.
Q 5.Can the same EIN be used for multiple businesses?
A. It is best to have a separate EIN for all of your businesses to keep finances and company assets separated.
How to Apply for an EIN with us:
While you have the option to apply for an Employee Identification Number with the IRS, we make the process even easier if you choose to apply for EIN Number using our services at CA on Web Pvt. Ltd.
Chartered Accountant by profession, CA Sakshi Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.