The Federal Tax Identification Number or the Federal Employer Identification Number (FEIN) is also known as the Employer Identification Number (EIN). It is a unique 9-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. When this number is used for the purposes of employment tax reporting, it is usually referred to as an EIN and is used for tax administration.
Who uses EIN? EIN are used by employers, sole proprietors, corporations, partnerships, non-profit organizations, trusts and estates, government agencies, certain individuals, and other business entities. EIN is used by the IRS to identify taxpayers that are required to file various business tax returns. Individuals who are employers may choose to either obtain an EIN or use their Social Security number for the purpose of reporting taxes withheld on behalf of their employees. Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents.
An employer needs an EIN in order to pay employees and to file business tax returns. A Partnership, LLC, Corporation, Non-profit, etc. must obtain an EIN in order to open an account for their business. An organization has to be legally formed before it can apply for the EIN.
How to get Federal tax id? First, go to the IRS website. Proper registration must be done via the IRS. Identify your entity type and fill out the application form. If you are not sure of the entity type, you can take a simple survey run by govdocfiling.com. Once an EIN is issued, it will not be reissued. EINs do not expire.
There are certain cases where you will need to obtain a new EIN.
- When a sole proprietorship changes to a corporation or partnership.
- When partnership changes to a corporation or sole proprietorship.
- When a corporation changes to a partnership or sole proprietorship.
- When an individual owner dies, and the business is taken over by the estate.
In the above cases, you can apply online for tax id number with the IRS. Online application for a tax id number is available for all business entities who principal office or legal residence is in the United States. Once the EIN number is issued, it can be used immediately for most of your business’ needs e.g.:
- Opening a bank account
- Applying for a business license in your state
- Filing a tax return by mail.