US Federal Employer Identification Number (“EIN”)
An EIN is a federal tax identification number for businesses in the US (or for individuals who don’t have a Social Security Number).
An EIN is required to register for sales tax, and it’s useful for a business to have when trading in the USA. It can make importing into the States much simpler and is usually required by banks when trying to open a business account.
Registering your business for an EIN does not create any filing or tax obligations, but If you have to pay federal taxes, your business must apply for this federal tax number.
What Is the Difference Between EIN and FEIN?
When referring to employer identification numbers, it is common to drop the word “federal,” and refer only to EIN’s. A federal employment identification number (FEIN) is the exact same thing as an employer identification number (EIN).
In this article, we will use EIN, so don’t get confused!
Do I need an EIN to register for sales tax?
Most US states require a federal reference number before they will issue a sales tax permit. It is a reference only, simply having the EIN does not create federal tax obligations.
What is an EIN Number Used For?
Your EIN is a unique number that identifies your business to the Internal Revenue Service (IRS). Once you have a EIN, you can use this number if you have to file federal tax returns.
You also need your EIN for payroll forms, and in fact, you cannot hire employees until you have a federal EIN. Once you have employees, you need your FEIN to remit payroll taxes such as Social Security contributions and Medicare premiums and income tax on behalf of your employees.
In addition to tax forms, you can also use your EIN to open business bank accounts, apply for credit cards for your business, and take out business loans.
Is the EIN the same as a Tax ID?
An EIN is a tax identification number, but not all businesses need an EIN. If you don’t have employees or if your business is not incorporated, you won’t need an EIN. In these cases, you simply use your personal Social Security Number (SSN) as your tax ID.
What Is the Difference Between an FEIN and an SSN?
SSN stands for Social Security Number. Like an EIN, this number is also issued by the federal government. However, while a, EIN identifies your business, an SSN identifies you personally (to the government and other entities).
Therefore, you’ll need to call the IRS and they will issue it over the phone. You’ll have to wait a while for them to answer (up to 20 minutes), but once they pick up, they will ask questions about the business and it takes about 5 minutes.
How Do I Get a FEIN Number?
You can only apply online if you have a US taxpayer identification number (usually an SSN or ITIN)
If you do not have a US tax ID, the only way to apply is to call the IRS directly.
You can call +1 267-941-1099 (6am to 11pm Eastern Time USA)
What information do I need to apply?
To request the EIN, you will need information about your business, and, depending on the structure of your business, you may need information about co-owners, partners and other executives.
You can see the information required for the application on the IRS Form SS4.
Yonda is happy to advise on how to apply for the EIN, but the application must be completed by an officer, employee or representative of the business.