EIN for 1099: Who Needs One, How to Apply, and W-9 Use

If you issue 1099s, you need an Employer Identification Number on every form, with no exceptions. If you receive a 1099, you need an EIN only when your business is a corporation, partnership, or multi-member LLC; sole proprietors and single-member LLCs can use a Social Security number instead, though plenty get an EIN anyway to keep their SSN off every client’s paperwork.¹

Who Needs an EIN on a 1099

The IRS uses the umbrella term Taxpayer Identification Number (TIN) to cover Social Security numbers, Individual Taxpayer Identification Numbers, and EINs. Which one you put on a 1099 depends on your role and your entity type.¹

If you’re the payer — the business writing the checks and filing the 1099 — your SSN won’t work. You need an EIN on every form you issue, even if you’re a sole proprietor hiring subcontractors. The payer’s EIN identifies you to the IRS on every information return you file.²

If you’re the contractor receiving the 1099, the answer depends on how your business is structured:

Sole proprietor or single-member LLC: either your SSN or an EIN works. The IRS accepts both, and you’re not required to get an EIN unless you have employees or file excise tax returns.
Corporation, partnership, or multi-member LLC: you must use an EIN. These entities are legally separate from their owners and need their own federal tax identification.³

Why Sole Proprietors Often Get an EIN Anyway

Every client who pays you $600 or more needs your taxpayer ID to file a 1099-NEC.² Without an EIN, you’re handing your Social Security number to every client, their bookkeeper, and whatever accounting software they use. That’s a lot of exposure for a nine-digit key to your entire financial identity.

An EIN lets you keep your SSN private on W-9 forms, invoices, and credit applications. It won’t eliminate identity theft risk, but it removes your most sensitive personal identifier from routine business paperwork. An EIN also makes it easier to open a business bank account and apply for trade credit, and some banks require one to open a business account at all. Many sole proprietors get an EIN for the privacy benefit alone, even when their business structure doesn’t demand it.

How to Get an EIN

Applying for an EIN is free. The application is Form SS-4, though most people never touch the paper version. The IRS strongly recommends applying online, and the process takes about 15 minutes.⁴

Online

This is the fastest route. You’ll answer questions about your business type, legal name, address, and reason for applying. The person applying must already have a valid SSN, ITIN, or EIN to serve as the “responsible party.” The system assigns your EIN immediately when you finish, and you can use it that same day to open accounts or file returns.⁴

The online tool isn’t available around the clock. It runs Monday through Friday from 6 a.m. to 1 a.m. Eastern, Saturday from 6 a.m. to 9 p.m., and Sunday from 6 p.m. to midnight.⁵ If you need the EIN urgently, plan around those hours.

Fax or Mail

If you can’t use the online tool (applicants outside the U.S. or its territories, for example), you can fax a completed Form SS-4. The IRS typically assigns the EIN within four business days by fax. Mail is the slowest option, with a four- to five-week wait before the EIN arrives.⁴

Putting Your EIN on the W-9

Once you have an EIN, the flow is simple. Your client sends you a Form W-9 asking for your taxpayer identification number. You fill in your legal name, business name (if different), address, tax classification, and EIN in Part I, then sign and date the certification. That signature confirms your TIN is correct and states whether you’re subject to backup withholding.¹ The client keeps the W-9 on file and uses it to prepare your 1099-NEC after year-end. Your EIN goes in the recipient’s TIN box; the client’s EIN goes in the payer’s box.

Single-member LLC owners should pay close attention to Line 1 and Line 2 of the W-9. The IRS wants the owner’s name on Line 1 and the LLC’s name on Line 2, not the other way around. Reversing those two is one of the most common W-9 mistakes, and it can trigger a TIN mismatch notice.⁶

What Happens Without a Valid TIN

If a contractor doesn’t provide a TIN, provides the wrong one, or refuses to certify the W-9, the payer can’t just leave the box blank. Federal law requires the payer to withhold 24% of every reportable payment and send it to the IRS. This is called backup withholding.⁷

Backup withholding is triggered in four situations: the payee fails to provide a TIN, the IRS notifies the payer that the TIN is incorrect, there’s been unreported interest or dividend income by the payee, or the payee fails to properly certify the W-9.⁸ Any amount withheld shows up in Box 4 of the 1099-NEC.²

The practical takeaway for contractors: return the W-9 promptly with the correct TIN. A 24% cut from every check is a steep price for procrastination, and the money isn’t refunded until you file your annual return and claim credit for what was withheld.

Foreign Contractors Use Different Forms

The W-9 and 1099-NEC process applies only to U.S. persons. A foreign contractor — someone who isn’t a U.S. citizen or resident alien — doesn’t get a W-9. The payer requests Form W-8BEN (for individuals) or W-8BEN-E (for entities) to certify foreign status.⁹ Payments to nonresident aliens are reported on Form 1042-S rather than Form 1099-NEC, and they follow their own withholding rules under tax treaties.¹⁰

1
Internal Revenue Service. Form W-9, Request for Taxpayer Identification Number and Certification
2
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
3
Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN)
4
Internal Revenue Service. Instructions for Form SS-4
5
Internal Revenue Service. Get an Employer Identification Number
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Internal Revenue Service. Instructions for the Requester of Form W-9
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Internal Revenue Service. Backup Withholding
8
Office of the Law Revision Counsel. 26 U.S. Code 3406 – Backup Withholding
9
Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
10
Internal Revenue Service. Reporting Payments to Independent Contractors