What is an Employer Identification Number (EIN), and does my business need one?

An Employer Identification Number (EIN) is a free, nine-digit tax identification number the IRS assigns to businesses and other entities, functioning like a Social Security Number (SSN) for your business. Most U.S. business entities, including LLCs, corporations, partnerships, nonprofits, and sole proprietors with employees, need one to open business bank accounts, file Form 1040 with business income, pay employees, or issue 1099s to contractors.

Your business likely needs an EIN if any of the following apply:

• You operate as a corporation, partnership, or multi-member LLC
• You have or plan to hire employees (including household employees)
• You withhold or pay excise taxes
• You have a Keogh plan or other qualified retirement plan
• You need to open a U.S. business bank account
• A client or payer asks for your federal tax ID to issue a 1099

Sole proprietors with no employees and no plans to incorporate sometimes use their SSN instead. However, many tax professionals recommend obtaining an EIN regardless to keep personal and business finances separate and reduce the risk of identity theft.

Applying from abroad: You cannot apply for an EIN online if the responsible party lacks a U.S. SSN or ITIN. Instead, submit Form SS-4 by fax to +1-855-215-1627 (4 to 6 weeks) or call the IRS international line at +1-267-941-1099 for same-day processing.

EINs do not expire and are assigned permanently to your business. If you close a business and open a new one, you need a new EIN for the new entity.

If you’re a self-employed U.S. expat running a business abroad, explore how Schedule C business deductions interact with the FEIE and Foreign Tax Credit.