Whether you need an EIN for your small business depends on how it’s organized and what it does. Corporations, partnerships, and multi-member LLCs must have one from the start. Sole proprietors and single-member LLCs can usually use a Social Security Number instead, unless they hire employees or trigger one of a short list of other requirements. Applying is free and takes only a few minutes on the IRS website.1Internal Revenue Service. Get an Employer Identification Number
Structures That Always Need an EIN
Some business types need an EIN because of the way they’re organized, before you look at revenue, employees, or anything else.
A corporation must have an EIN to file its income tax return on Form 1120. The form requires it, and electronic filers cannot submit without one.2Internal Revenue Service. Instructions for Form 1120 (2025)
A partnership is treated as a separate entity for federal tax purposes and needs its own EIN to file Form 1065. That’s true regardless of revenue or how many partners are involved.1Internal Revenue Service. Get an Employer Identification Number
A multi-member LLC is classified as a partnership by default, so the same rule applies. If any LLC elects to be taxed as a corporation by filing Form 8832, it also needs an EIN for that corporate return.3Internal Revenue Service. LLC Filing as a Corporation or Partnership
Sole Proprietors and Single-Member LLCs
If you run the business alone with no employees, you have the most flexibility. A sole proprietor can use a personal Social Security Number for tax filings, W-9 forms, and most banking purposes. The IRS does not require a separate EIN in that situation.1Internal Revenue Service. Get an Employer Identification Number
A single-member LLC is treated as a “disregarded entity” by default. The owner reports business activity on their personal Form 1040 using their Social Security Number. That changes if the LLC elects corporate tax treatment on Form 8832, or if any of the operational triggers below applies.3Internal Revenue Service. LLC Filing as a Corporation or Partnership
One nuance worth flagging for single-member LLC owners: even though the LLC is disregarded for income tax purposes, the IRS treats it as a separate entity for employment taxes and certain excise taxes. So if your single-member LLC hires even one worker, that LLC needs its own EIN, not just yours.3Internal Revenue Service. LLC Filing as a Corporation or Partnership
Activities That Trigger the Requirement
Even if your structure doesn’t force the issue, certain things you do will.
- Hiring employees. The moment you bring on a single employee, you need an EIN to handle payroll tax withholding and to report federal unemployment taxes.1Internal Revenue Service. Get an Employer Identification Number
- Paying nonresident aliens. If your business pays income to foreign individuals, you’re generally required to withhold 30% and report it on Form 1042, which requires an EIN.4Internal Revenue Service. NRA Withholding
- Filing federal excise tax returns. Businesses that owe excise taxes must use an EIN on those returns. For alcohol and tobacco producers, missing the EIN can result in a $50 penalty per occurrence.5eCFR. 27 CFR Part 19 Subpart I – Requirements for Employer Identification Numbers
- Operating a trust or estate. Trusts and estates generally need their own EIN to manage assets and file returns separately from the grantor or decedent.
- Applying for tax-exempt status. Nonprofits seeking recognition under Section 501(c)(3) must have an EIN before submitting the application, and they’ll use it on annual information returns going forward.6Internal Revenue Service. Tax-Exempt Organizations Need an Employee Identification Number
- Administering retirement plans. Keogh plans and other qualified retirement programs require an EIN to track contributions and distributions.
One thing to keep in mind before applying: once you receive an EIN, you’re responsible for filing any required tax or information returns tied to it, even if you haven’t started operations yet.1Internal Revenue Service. Get an Employer Identification Number
When It’s Optional but Still a Good Idea
Plenty of sole proprietors and single-member LLCs get an EIN even when the IRS doesn’t require it. Two reasons come up most often.
The first is banking. Many financial institutions require an EIN to open a business bank account. The ones that still accept a Social Security Number are getting harder to find. If you plan to separate your business and personal finances, having an EIN in hand saves you from being turned away at the counter.
The second is identity protection. Every time you hand a W-9 to a client or vendor, you’re sharing a taxpayer identification number. If that number is your SSN, you’re spreading around the same identifier tied to your credit and personal tax life. An EIN keeps your SSN off business paperwork, which reduces your exposure to identity theft. That matters more the more clients you work with.
Since applying is free and takes minutes, the case for getting one anyway is a strong one for most solo operators.
How to Get an EIN Without Paying for It
Applying through the IRS costs nothing. The online application at IRS.gov/EIN is the fastest route: you answer a series of questions and receive your EIN on screen at the end of the session. The tool is available Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern, Saturday from 6:00 a.m. to 9:00 p.m., and Sunday from 6:00 p.m. to midnight. You must have a legal residence or principal business location in the United States or its territories, and the responsible party must have a valid SSN, ITIN, or existing EIN. Only one EIN per responsible party per day is allowed through the online system.1Internal Revenue Service. Get an Employer Identification Number
If you can’t use the online tool, you can complete Form SS-4 and submit it by fax (typically about four business days for a response) or by mail (about four weeks).7Internal Revenue Service. Instructions for Form SS-4 (12/2025)
A warning about third-party sites: search for “apply for EIN” and you’ll find companies charging up to $300 to file the same free application on your behalf. The Federal Trade Commission has sent warning letters to operators of these sites for not adequately disclosing that their fee buys nothing the IRS doesn’t already provide at no cost. If the URL doesn’t end in .gov, you’re not on the IRS site. Some of these pages use government-style logos and language that make them look official. They aren’t, and there’s no reason to pay.1Internal Revenue Service. Get an Employer Identification Number