Do I Need an EIN? How to Know If Your Business Needs One
Do you need an Employer Identification Number (EIN)? It depends on your business structure, employees, federal tax obligations, and other circumstances.
In general, you need an EIN if you have employees, certain federal tax filing obligations, or operate an entity such as a partnership, corporation, or certain LLCs, trusts, estates, or tax-exempt organizations. The IRS also allows some businesses that do not otherwise need an EIN to request one for legitimate business purposes such as banking or state tax requirements.
Quick answer
If you operate a corporation or partnership, have employees, or have certain federal tax obligations, you generally need an EIN. If you are a sole proprietor with no employees and none of the applicable federal tax requirements, you may not need one. LLC requirements depend on how the LLC is classified and what it does.
This guide explains how to determine whether you need an EIN before you apply.
EIN Requirement at a Glance
Use this quick guide as a starting point:
| Your situation | Do you need an EIN? |
|---|---|
| You have employees | Generally yes |
| You operate a partnership | Yes |
| You operate a corporation | Yes |
| You operate certain LLCs | Generally yes |
| You operate a tax-exempt organization | Generally yes |
| You have an estate | Generally yes |
| You have a trust | Often yes, with exceptions |
| You are a sole proprietor with employees | Yes |
| You are a sole proprietor with no employees | Not necessarily |
| You need to file certain employment or excise tax returns | Yes |
| You need to withhold certain taxes on payments to a nonresident alien | Yes |
| You need an EIN for certain banking or state tax purposes | Possibly |
| You simply want an EIN but have no applicable business reason | Usually not necessary |
The exact answer depends on your circumstances. The IRS identifies specific situations in which an EIN is required and also permits an EIN to be requested for certain banking or state tax purposes even when it is not required for federal tax purposes.
When Do You Need an EIN?
The IRS currently says you need an EIN if you:
- Have employees
- Need to pay employment taxes
- Need to pay certain excise taxes
- Need to pay certain alcohol, tobacco, or firearms taxes
- Withhold taxes on income, other than wages, paid to a nonresident alien
- Operate certain types of entities that require an EIN
The IRS specifically lists partnerships, LLCs, corporations, tax-exempt organizations, estates, trusts subject to the applicable rules, retirement plans or IRAs, real estate mortgage investment conduits, and farmers’ cooperatives among entities that need an EIN.
The exact rule can vary by entity and tax situation, so the word “LLC” or “sole proprietor” by itself is not always enough to determine the answer.
Do I Need an EIN If I Have Employees?
Yes, generally.
If you have employees and are required to report employment taxes, you generally need an EIN.
The IRS states that employers who are required to report employment taxes need an EIN. An EIN is used to identify the employer’s federal tax account.
This applies to more than traditional businesses. For example, household employers with household employees generally need an EIN to file Schedule H.
What if I plan to hire employees later?
If you expect to become an employer and will have employment-tax obligations, plan for the EIN requirement before you begin filing employment tax returns.
The important point is that having employees is one of the clearest reasons an EIN is required.
Do I Need an EIN If I Have No Employees?
Not necessarily.
Having no employees does not automatically mean that you need an EIN, but having no employees does not automatically mean that you can avoid getting one either.
The IRS lists several reasons for needing an EIN that have nothing to do with having employees. These include operating certain entity types and having certain federal tax obligations.
For example:
- A partnership generally needs an EIN.
- A corporation generally needs an EIN.
- A tax-exempt organization generally needs an EIN.
- An estate generally needs an EIN.
- Certain trusts need an EIN.
- A sole proprietor without employees may not need one unless another requirement applies.
Therefore, “I don’t have employees” is not by itself a complete EIN test.
Do I Need an EIN as a Sole Proprietor?
This is one of the most common EIN questions.
A sole proprietor does not automatically need an EIN simply because they operate a business.
If you are a sole proprietor with no employees and none of the other EIN requirements apply, you may be able to use your SSN for federal income-tax reporting.
However, a sole proprietor may need an EIN for other federal tax obligations or may choose to obtain one for legitimate business purposes.
The IRS Form SS-4 instructions state that a sole proprietor generally needs only one EIN, and they identify situations in which a new EIN becomes necessary, such as incorporating or forming a partnership.
A sole proprietor generally needs an EIN when:
- They have employees and must report employment taxes.
- They have certain excise-tax obligations.
- They have certain other federal filing requirements.
- They establish a qualifying retirement plan.
- Another applicable IRS rule requires an EIN.
The IRS also recognizes legitimate business reasons for a sole proprietor to request an EIN even when it is not otherwise required for federal tax purposes.
What if I am a freelancer or independent contractor?
Being a freelancer or independent contractor does not automatically mean you need an EIN.
If you operate as a sole proprietor, have no employees, and no other EIN requirement applies, you may not be required to obtain one solely because you earn self-employment income.
However, your individual tax obligations are separate from the question of whether you need an EIN.
For more detail, see:
Do I Need an EIN for an LLC?
It depends on the LLC’s federal tax classification and circumstances.
This is an area where oversimplified EIN advice can cause confusion.
An LLC is a legal entity created under state law, but its federal tax treatment can differ depending on its ownership and elections.
The IRS currently lists LLCs among the entities that need an EIN, but federal tax rules contain important distinctions for single-member LLCs and how they are treated for federal income-tax purposes.
Single-member LLC
A single-member LLC that is treated as a disregarded entity for federal income-tax purposes can have different federal income-tax reporting from an LLC that is treated as a corporation.
For example, the IRS explains that a single-member LLC that is disregarded for federal income-tax purposes generally reports its income on the owner’s return. However, separate EIN requirements can still apply for employment taxes, certain excise taxes, and other situations.
Multi-member LLC
A domestic LLC with more than one member is generally treated as a partnership for federal income-tax purposes unless it makes an election to be treated as a corporation.
Because partnerships generally need an EIN, a multi-member LLC will generally need an EIN.
LLC electing corporate treatment
An LLC that elects to be treated as a corporation has different federal tax requirements, including EIN considerations.
Bottom line: Don’t determine whether an LLC needs an EIN solely by counting its members. Determine the LLC’s federal tax classification and other applicable requirements.
For a dedicated guide:
Do I Need an EIN for a Partnership?
Yes.
The IRS lists a partnership as an entity that needs an EIN.
This generally applies even if the partnership has no employees.
If two or more owners operate a business as a partnership for federal tax purposes, the partnership generally needs its own EIN for federal tax reporting.
An individual partner’s SSN does not replace the partnership’s EIN when the partnership is required to have one.
See:
Do I Need an EIN for a Corporation?
Yes.
Corporations generally need an EIN.
The IRS lists corporations among the entities that need an EIN and uses the EIN to identify the entity for federal tax purposes.
This includes corporations that may not currently have employees.
If you form a corporation, the EIN is associated with the corporation rather than simply serving as the owner’s personal tax identification number.
See:
Do I Need an EIN for a Nonprofit?
Generally, yes.
The IRS lists tax-exempt organizations among entities that need an EIN.
An organization should distinguish between:
- Obtaining an EIN, and
- Applying for or obtaining federal tax-exempt status.
An EIN does not by itself make an organization tax-exempt.
If you are creating a nonprofit organization, make sure the organization is legally formed before applying where applicable. The IRS provides separate guidance for organizations seeking tax-exempt status.
See:
EIN for Nonprofit Organizations
Do I Need an EIN for a Trust?
Often, but not every trust follows exactly the same EIN rule.
The IRS lists trusts among entities that may need an EIN, while also recognizing exceptions such as certain grantor-owned revocable trusts.
Trust taxation can be highly fact-specific.
The type of trust, its tax treatment, and the circumstances surrounding the trust can affect whether an EIN is required.
Do not assume that every trust automatically requires a separate EIN.
See:
Do I Need an EIN for an Estate?
Generally, yes.
An estate generally needs an EIN for federal tax purposes.
When a person dies, the estate can become a separate taxpayer for certain federal tax purposes. The executor, administrator, personal representative, or other fiduciary may need to obtain an EIN for the estate.
The IRS Form SS-4 instructions specifically address estates and explain how the legal name should be entered when applying.
See:
Do I Need an EIN for a Tax-Exempt Organization?
Generally, yes.
The IRS lists tax-exempt organizations among the entities that need an EIN.
An organization should obtain its EIN as part of establishing its federal tax identity, but an EIN itself does not grant tax-exempt status.
Organizations should separately review the IRS rules that apply to their particular type of tax-exempt organization.
Do I Need an EIN for a Business Bank Account?
Maybe.
An EIN may be requested when opening a business bank account, although the exact requirements depend on the financial institution and the type of account.
The IRS states that you can request an EIN for banking purposes even when you do not need one for federal tax purposes.
That means a bank requirement can be a legitimate reason for obtaining an EIN, but you should check the bank’s current requirements rather than assuming that every bank requires one for every business structure.
Do I Need an EIN for a Business License?
Possibly.
Some government agencies may ask for an EIN as part of business registration, licensing, or tax registration.
However, an EIN is not itself a business license.
A business may need several different registrations, including:
- Federal tax identification
- State tax registration
- Local business licensing
- Professional licensing
- Industry-specific permits
The exact requirements depend on the location and activity of the business.
If a state agency specifically requires an EIN, the IRS allows an EIN to be requested for state tax purposes even when it is not otherwise required for federal tax purposes.
Do I Need an EIN If I Am a Foreign Business Owner?
Possibly, and the answer depends on the business and its U.S. tax obligations.
Being a non-U.S. resident does not automatically eliminate the need for an EIN.
Foreign applicants can obtain EINs, but the application procedure is different when the principal place of business is outside the United States or U.S. territories.
The IRS says applicants whose principal place of business is outside the United States or U.S. territories cannot use the online EIN application and should apply through another available method.
A foreign person should distinguish between:
- Whether the business needs an EIN
- Whether the individual needs an SSN
- Whether the individual needs an ITIN
- Whether the business has a U.S. tax filing obligation
These are separate questions.
See:
Do I Need an EIN If I Only Have One Business?
Not necessarily.
Having one business does not by itself determine whether you need an EIN.
For example, a sole proprietor with one business and no employees may not need an EIN if none of the other requirements apply.
On the other hand, a corporation or partnership generally needs an EIN regardless of whether it operates one business or many activities.
The entity’s structure and tax obligations matter more than the number of businesses you operate.
Do I Need an EIN for Multiple Businesses?
If you operate multiple businesses as a sole proprietor, the IRS says a sole proprietor generally should file only one Form SS-4 and generally needs only one EIN, regardless of the number of businesses operated as a sole proprietorship or trade names used.
However, different legal entities generally require their own EINs.
For example, owning:
- One sole proprietorship
- One corporation
- One partnership
does not mean all three entities should use the same EIN.
Each entity’s federal tax identity must be considered separately.
Do I Need an EIN If I Use a DBA?
A DBA (Doing Business As) is generally a business or trade name rather than a separate legal entity.
Simply registering or using a DBA does not automatically create a new EIN requirement.
For example, a sole proprietor may operate under a trade name while remaining the same sole proprietorship for federal tax purposes.
The IRS Form SS-4 instructions state that a sole proprietor generally needs only one EIN regardless of the number of businesses operated as sole proprietorships or trade names.
However, if the business is actually organized as a separate legal entity, the analysis changes.
Do I Need an EIN If I Work From Home?
Working from home does not by itself determine whether you need an EIN.
The EIN question depends on your business structure and federal tax obligations.
A home-based sole proprietor may or may not need an EIN.
A home-based corporation or partnership generally does.
Likewise, a home-based business with employees generally needs an EIN for employment tax purposes.
Your physical location is therefore not the primary test.
Do I Need an EIN If I Am Self-Employed?
Not automatically.
Being self-employed and needing an EIN are two different questions.
A self-employed person operating as a sole proprietor may not need an EIN if they have no employees and none of the other EIN requirements apply.
However, certain federal tax obligations can create an EIN requirement.
The IRS distinguishes between a taxpayer’s individual tax identification number and an EIN used for business activities.
Do I Need an EIN If I Am an Independent Contractor?
Not necessarily.
An independent contractor can operate as a sole proprietor without automatically needing an EIN.
For federal tax purposes, the important question is the contractor’s business structure and tax obligations.
If the contractor has employees or another EIN requirement applies, an EIN may be required.
If none of those requirements apply, the contractor may not need one.
Do I Need an EIN for an Online Business?
Not automatically.
An online business is treated according to its legal and federal tax structure, just like a traditional business.
For example:
- An online sole proprietor may not need an EIN if no other requirement applies.
- An online partnership generally needs an EIN.
- An online corporation generally needs an EIN.
- An online business with employees generally needs an EIN.
- An online LLC may need an EIN depending on its federal tax classification and circumstances.
Selling products or services online does not by itself determine the answer.
Do I Need an EIN to Open a Business Bank Account?
You may.
Some banks require an EIN for business accounts, while their requirements can vary based on the type of business and account.
The IRS specifically recognizes banking as a possible reason to obtain an EIN even when the number is not required for federal tax purposes.
If your bank requests an EIN, verify the exact documentation it requires before applying.
Do I Need an EIN If I Don’t Pay Taxes Yet?
Possibly.
An EIN requirement is not based solely on whether you currently owe federal income tax.
You can have an EIN requirement because of:
- Your entity type
- Employees
- Employment taxes
- Certain excise taxes
- Certain withholding obligations
- Other federal filing requirements
Therefore, “I don’t owe taxes yet” is not enough to determine whether you need an EIN.
Do I Need an EIN Before Forming an LLC?
Generally, form the LLC first when state law requires the entity to be formed before obtaining its EIN.
The EIN application asks for information about the entity, including its legal name and entity type.
The IRS also advises organizations such as nonprofits to be legally formed before applying for an EIN.
For a newly created LLC, the practical sequence is generally:
- Form the LLC with the appropriate state authority.
- Confirm the LLC’s federal tax classification.
- Determine whether an EIN is required.
- Gather the responsible party’s information.
- Apply for the EIN.
Do not assume that obtaining an EIN creates the LLC. An EIN is a federal tax identification number; it is not state business formation.
A Simple EIN Decision Tree
Use this simplified decision process:
-
Do you operate a corporation or partnership?
Yes → You generally need an EIN. No → Continue.
-
Do you have employees or expect to have employees?
Yes → You generally need an EIN. No → Continue.
-
Do you have an applicable federal employment, excise, or other tax requirement?
Yes → You may need an EIN. No → Continue.
-
Are you an LLC?
Yes → Determine the LLC’s federal tax classification and circumstances. No → Continue.
-
Are you a sole proprietor?
Yes → You may not need an EIN if no other requirement applies. No → Continue.
-
Are you an estate, trust, tax-exempt organization, or another entity listed by the IRS?
Yes → An EIN may be required. No → Continue.
-
Do you need an EIN for banking or state tax purposes?
Yes → You may request one even if it is not required for federal tax purposes. No → An EIN may not be necessary.
This decision tree is a general guide, not a substitute for reviewing the IRS rules that apply to your particular entity.
What If I Get an EIN Even Though I Don’t Need One?
The IRS allows certain businesses to request an EIN even when they do not need one for federal tax purposes, including for banking or state tax purposes.
However, you should not assume that obtaining an EIN automatically changes your federal tax classification.
An EIN is an identification number. It does not:
- Create an LLC
- Incorporate a business
- Make a business tax-exempt
- Automatically change your federal tax classification
- Replace an SSN or ITIN when one is required
The purpose of the EIN is to identify the appropriate taxpayer or entity for applicable federal tax and reporting purposes.
Is It Better to Get an EIN Anyway?
There is no universal rule that every small-business owner should obtain an EIN simply because one is available for free.
For some sole proprietors, obtaining an EIN can be useful for legitimate business purposes.
For others, it may not be necessary.
The better approach is to determine:
- What type of entity you operate
- How the entity is classified for federal tax purposes
- Whether you have employees
- Whether you have employment or excise tax obligations
- Whether another IRS rule requires an EIN
- Whether your bank or state requires one
Then apply if appropriate.
What Information Do You Need to Apply for an EIN?
If you determine that you need an EIN, you should have the necessary information ready before starting the application.
The IRS online application asks for information including:
- The entity type
- The legal name
- The responsible party
- The responsible party’s SSN, ITIN, or other applicable taxpayer identification information
- Business information relevant to the application
The IRS says the online application must be completed in one session and cannot be saved for later.
For a detailed preparation checklist:
How Do You Apply for an EIN?
If you determine that you need an EIN, the IRS allows eligible applicants to apply online.
The IRS currently states that its online EIN application is free, and approved applicants receive their EIN immediately online.
Applicants who cannot use the online system may need to apply using Form SS-4 through another IRS-approved method.
For complete instructions:
You can also learn more about:
What If I Am Not Sure Whether I Need an EIN?
If your situation does not fit neatly into one of the categories above, don’t guess.
Start by identifying your legal and federal tax structure.
Ask:
- Am I a sole proprietor?
- Am I an LLC?
- Is my LLC single-member or multi-member?
- Is the LLC disregarded for federal income-tax purposes?
- Am I taxed as a corporation?
- Am I operating a partnership?
- Do I have employees?
- Do I have employment or excise tax obligations?
- Am I creating a nonprofit?
- Am I administering an estate or trust?
- Does a bank or state agency require an EIN?
The IRS Form SS-4 instructions are the best primary source for determining which situations require an EIN, and the IRS recommends applying electronically when possible.
Frequently Asked Questions
Do all businesses need an EIN?
No. Not every business automatically needs an EIN. Requirements depend on the business structure and circumstances. Corporations and partnerships generally need one, while some sole proprietors without employees or other EIN requirements may not.
Do I need an EIN if I have no employees?
Not necessarily. Some businesses without employees need an EIN because of their entity type or other federal tax requirements.
Do I need an EIN for an LLC?
It depends. LLCs have different federal tax classifications, and the EIN requirement can depend on the LLC’s ownership, classification, and activities.
Do I need an EIN as a sole proprietor?
Not necessarily. A sole proprietor without employees may not need one if no other EIN requirement applies.
Do I need an EIN for a DBA?
A DBA by itself does not automatically require a separate EIN. A sole proprietor generally uses one EIN regardless of the number of sole-proprietorship businesses or trade names.
Do I need an EIN for a partnership?
Yes. The IRS lists partnerships among the entities that need an EIN.
Do I need an EIN for a corporation?
Yes. Corporations generally need an EIN.
Do I need an EIN for a nonprofit?
Generally yes. Tax-exempt organizations are among the entities identified by the IRS as needing an EIN.
Do I need an EIN if I am self-employed?
Not automatically. Self-employment alone does not determine whether an EIN is required.
Do I need an EIN to open a business bank account?
Possibly. Some banks require one, and the IRS recognizes banking as a possible reason for obtaining an EIN.
Is an EIN free?
Yes. The IRS provides EINs directly without an application fee.
Can I get an EIN even if I don’t need one?
In some circumstances, yes. The IRS allows EIN requests for legitimate purposes such as banking or state tax purposes even when the EIN is not otherwise required for federal tax purposes.
Can I use my SSN instead of an EIN?
Only when the applicable tax rules allow you to use your SSN. If an EIN is required, do not substitute your SSN. The IRS specifically states that an SSN should not be used in place of an EIN.
Can I apply for an EIN online?
Eligible applicants can apply directly through the IRS online system. The IRS says an approved online application receives the EIN immediately.
Bottom Line: Do I Need an EIN?
You may need an EIN if you:
- Have employees
- Operate a partnership
- Operate a corporation
- Operate an LLC that requires an EIN under the applicable rules
- Operate a tax-exempt organization
- Administer an estate
- Operate a trust that requires an EIN
- Have certain employment, excise, or other federal tax obligations
- Have another circumstance identified by the IRS as requiring an EIN
If you are a sole proprietor with no employees, you may not need an EIN if none of the other requirements apply.
You may nevertheless choose to obtain one for a legitimate business purpose, such as certain banking or state tax requirements.
If you have determined that you need an EIN, the next step is to prepare the required information and apply directly through the IRS.
Continue Your EIN Research
- What Is an EIN?
- Who Needs an EIN?
- EIN Requirements
- How to Get an EIN
- EIN Application Online
- EIN for LLC
- EIN for Sole Proprietor
- EIN for Partnership
- EIN for Corporation
- EIN for Foreign Applicants
- EIN vs. SSN
Important disclaimer
This page provides general educational information about EIN requirements. It is not tax, legal, or accounting advice and does not create a professional-client relationship.
The information on this website is independent of the U.S. government. EmployerIdentificationNumber.online is not affiliated with, endorsed by, or operated by the Internal Revenue Service (IRS) or any other U.S. government agency.
IRS rules and procedures can change. For an individual tax situation or a question involving a complex entity structure, consult the current IRS guidance or a qualified tax professional.