What Is a Federal Tax ID Number and Who Needs One?

A federal tax ID number is the nine-digit code the IRS uses to identify a taxpayer on federal filings. For individuals, that’s usually a Social Security Number or, for people who aren’t eligible for one, an Individual Taxpayer Identification Number. For businesses and other organizations, it’s an Employer Identification Number. If you’re starting a company, the EIN is almost certainly what you need, and you can get one directly from the IRS at no cost.

The Main Types of Federal Tax IDs

Which number applies to you depends on whether you’re filing as a person or as an entity, and on your immigration status.

Social Security Number

The SSN is the default tax ID for U.S. citizens and for certain noncitizens who work, study, or otherwise have a valid reason to obtain one.1Social Security Administration. Request a Social Security Number for the First Time The Social Security Administration issues it, not the IRS, but it functions as your taxpayer identification number on every federal return you file.

Individual Taxpayer Identification Number

An ITIN is for people who have a federal filing obligation but can’t get an SSN. That includes nonresident and resident aliens, and their spouses or dependents, who don’t qualify for a Social Security Number.2Internal Revenue Service. Individual Taxpayer Identification Number (ITIN) You apply on Form W-7, which you can attach to your tax return and submit together. An ITIN that goes unused on a federal return for three straight years expires and has to be renewed before you can file again.3Internal Revenue Service. How to Renew an ITIN

Employer Identification Number

An EIN is the tax ID for anything that isn’t an individual. Corporations, partnerships, nonprofits, trusts, and estates all use an EIN to file returns, run payroll, and open bank accounts.4eCFR. 26 CFR 301.6109-1 – Identifying Numbers Sole proprietors who hire employees need one too. Because the EIN is the number most readers have to actively go out and get, the rest of this article walks through how it works.

Two Narrower Numbers

The IRS also issues an Adoption Taxpayer Identification Number, a temporary ID for a child in the adoption process whose adoptive parents can’t yet obtain an SSN for them. And anyone paid to prepare federal returns must get a Preparer Taxpayer Identification Number to sign those returns. Neither applies to a business owner registering their own company.

Who Needs an EIN

Federal regulations require any non-individual entity that files tax documents to use an EIN.4eCFR. 26 CFR 301.6109-1 – Identifying Numbers In practical terms, that pulls in:

  • Every corporation and partnership, regardless of size or revenue.
  • Multi-member LLCs, which the IRS treats as partnerships by default.
  • Single-member LLCs that elect corporate taxation or that hire employees. Otherwise, the owner can generally file under their SSN.
  • Sole proprietors the moment they put someone on payroll.
  • Trusts, estates, and nonprofits.

Beyond the legal requirement, most banks won’t open a business account without an EIN, and many state licensing agencies ask for one on their applications. It’s cheaper to get the number before you need it than to hold up a bank opening or a license renewal waiting on the IRS.

Information to Have Ready Before You Apply

The EIN application is Form SS-4. Gathering a few things ahead of time keeps the process to about ten minutes and prevents duplicate numbers being issued in your name.5Internal Revenue Service. Form SS-4 Application for Employer Identification Number

  • The entity’s legal name, exactly as it appears on your formation documents.
  • Any trade name or “doing business as” name you use.
  • The mailing address where the IRS should send your confirmation notice.
  • The responsible party. This is the individual who ultimately owns or controls the entity, and it has to be a person, not another business. Their SSN or ITIN goes on Line 7b.6Internal Revenue Service. Responsible Parties and Nominees
  • Your reason for applying: starting a business, hiring employees, changing entity structure, or opening a bank account. Your answer helps the IRS set up the right filing requirements on your account.

If more than one person could plausibly serve as the responsible party, you pick which one the IRS will recognize.6Internal Revenue Service. Responsible Parties and Nominees

How to Apply

The IRS accepts EIN applications four ways. Which one you use depends on how fast you need the number and where you’re based.

Online. The fastest route. You answer the same questions Form SS-4 asks, and the system issues your EIN at the end of the session. Only one EIN per responsible party per day is allowed.7Internal Revenue Service. Get an Employer Identification Number

Fax. Fax a completed SS-4 with your return fax number, and the IRS typically faxes the EIN back within about four business days.8Internal Revenue Service. Instructions for Form SS-4 (12/2025)

Mail. Same form, slower turnaround. Expect four to five weeks.8Internal Revenue Service. Instructions for Form SS-4 (12/2025)

Phone. Available only to international applicants whose principal place of business is outside the United States. The number is 267-941-1099, Monday through Friday, 6:00 a.m. to 11:00 p.m. Eastern Time, and the EIN is assigned on the call.9Internal Revenue Service. Employer Identification Number Domestic applicants can’t apply by phone.

If you’d rather have an accountant or attorney file for you, complete Line 18 of the SS-4 to authorize them as a third-party designee. Their authority ends the instant the EIN is assigned, and the IRS still mails the official confirmation notice to you.8Internal Revenue Service. Instructions for Form SS-4 (12/2025)

The IRS Does Not Charge for an EIN

Applying for an EIN is free through every method the IRS offers.7Internal Revenue Service. Get an Employer Identification Number The paid “EIN filing services” that appear in search results are third-party sites filling out the same free form on your behalf, sometimes for a few hundred dollars. Go straight to irs.gov and skip the middleman.

When You Need a New EIN vs. Just Updating the Old One

An EIN is permanent, but certain structural changes force you to apply for a new one. The triggers depend on entity type:10Internal Revenue Service. When to Get a New EIN

  • A sole proprietor who incorporates, forms a partnership, or declares bankruptcy needs a new EIN.
  • A corporation needs one after receiving a new charter from the secretary of state, becoming a subsidiary, converting to a partnership or sole proprietorship, or merging into a new corporation.
  • A partnership needs one if it incorporates, if one partner takes over the business as a sole proprietor after dissolution, or if the partners end and start a new partnership.
  • An LLC needs one if it terminates and forms a new corporation or partnership.

Routine changes don’t require a new number. If you move offices, rename the business, or add a partner, you keep the same EIN and report the change instead. A move or a change of responsible party is reported on Form 8822-B, and a change in responsible party has to be reported within 60 days.11Internal Revenue Service. About Form 8822-B, Change of Address or Responsible Party – Business

Finding a Lost EIN

Start with the original confirmation notice the IRS mailed when the EIN was issued. If that’s gone, your bank has the number on file from when you opened the business account, and it appears on every return you’ve filed. If nothing else turns it up, call the IRS Business and Specialty Tax line at 800-829-4933, Monday through Friday, 7:00 a.m. to 7:00 p.m. local time. After identity verification, they’ll give you the number over the phone and can send a 147C verification letter if you need formal documentation.9Internal Revenue Service. Employer Identification Number

Penalties for a Missing or Wrong Tax ID

Filing information returns or payee statements without a correct TIN carries real costs. The base penalty under federal law is $250 per return, capped at $3,000,000 a year, with the dollar figures indexed annually for inflation.12Office of the Law Revision Counsel. 26 USC 6721 – Failure to File Correct Information Returns If the IRS finds the failure was intentional, the penalty rises sharply. For returns due in 2026, intentional disregard runs $680 per return with no cap.13Internal Revenue Service. Information Return Penalties For a business filing hundreds of W-2s or 1099s, the math gets ugly fast.

State Tax IDs Are Separate

A federal EIN covers you with the IRS. It doesn’t register you with your state. Most states issue their own tax IDs for sales tax collection, payroll withholding, and unemployment insurance, and the exact requirements depend on where you operate. Five states have no statewide sales tax, but payroll-related registrations apply almost everywhere you have employees. After your EIN is in hand, check your state’s department of revenue or taxation for what else you owe.