If you are thinking about starting an LLC or have already formed your LLC, you may have heard about getting an EIN. In this article, we’ll go over the basics of EINs for LLCs, what their used for, and how to apply for an LLC EIN. Use the links below if you want to skip to a specific section within this article.
An Employer Identification Number or EIN is a nine-digit ID number, formatted as 12-3456789, that is issued by the IRS to identify businesses and other entities for tax purposes. EINs can be thought of as the business equivalent of an SSN. EINs are referred to by a variety of different names such as:
- Tax ID Number
- FEIN or Federal Employer ID Number
- Federal Tax Number
- Federal Tax ID Number
- Employer ID Number
- Employer Tax ID
- Employer Tax Identification Number
- Federal Employer Tax Identification Number
If you’re looking for more details on EINs, visit our guide What is an EIN?
EINs are used for 2 primary reasons: Tax Return Filings and Employment Taxes. While LLCs don’t directly pay taxes, they are required to file an information filing to ensure that the owners of the LLC pay their applicable taxes on their personal returns. For multi-member LLCs, their EIN is used to track their return. EINs are also used to track employment taxes paid by a business.
EINs for Business Banking
The other most important use of an EIN is to open a business bank account. Banks are required to verify that an LLC has been issued an EIN to open a bank account in the US. Opening a business bank account is an essential requirement to set up an LLC properly to ensure that the LLC maintains its limited liability status. Without having a separate business bank account, an LLC can lose it’s limited liability status by “piercing the corporate veil”. This essentially means that a court or creditor could find that the business is not truly a separate entity from the owner as an individual and thus target an LLC owners personal assets in addition the business’s assets.
Tax ID numbers for an LLC are issued by the IRS.Ways to Apply:
- By Mail
- By Fax
When applying by mail or by fax, you will need to download and fill out Form SS-4. Make sure all of the information is filled in correctly before sending the form back to the IRS. Incorrect information could mean your application gets rejected. Send the form to the correct address or fax number as indicated by the IRS. Your EIN will be faxed or mailed back to you after several business days.
Applying for your tax ID number online is the simplest and most preferred method to obtain an EIN as it ensures your LLC EIN number is issued almost instantly.
How to Apply for an LLC EIN Online
When applying online for an EIN for your LLC there are 4 main steps to follow:
- Form your LLC
- Gather Essential Information
- Complete the Online Application
- Save your Confirmation Letter
Before you apply for a tax ID number for your LLC, you first need to form your LLC. For more information on forming your business, check out our step-by-step guide explaining exactly how to start an LLC.
The reason you need to form your LLC before applying for a tax ID number is that your information given in your EIN application (LLC name, address, responsible party, etc.) must match your LLC formation documents.
We recommend waiting until you receive approval from your Secretary of State before you begin applying for your EIN.
Once your LLC is formed and filed with your local government, you can begin the EIN application process. The online application system from the IRS requires the application to be completed in one sitting and has a timeout function that automatically terminates your session if there are more than 15 minutes of inactivity. As a result, we recommend that you gather this essential information beforehand so that you don’t need to use multiple sessions to complete your application.
You will need to know the following:
- Legal Name of LLC (this should exactly match the name on your approved Articles of Organization document)
- Business Address (Must be a physical address, not PO Box)
- Responsible Party Name and SSN – (The member or person who will be responsible for assets, handling money, and filing/paying taxes. There only needs to be one responsible party listed.)
- Whether or not the LLC will hire employees
The final step to applying for your LLC EIN number is to fill out the application through the IRS EIN Online Assistant. The application must be filed during business hours, which are Monday through Friday, 7 a.m. to 10 p.m. EST.
Follow the steps through the Online Assistant, inputting the correct information where required.
Once you complete the application, you will receive an EIN Confirmation Letter (also called Form CP-575). Save this letter for your records!
You are now on your way to establishing or growing your LLC. Your new tax ID number for your LLC can help you obtain a bank account, hire employees, and securely file taxes without using your personal identification.
LLC EIN FAQs
As new business owners explore how to get an EIN for an LLC, there are several common questions that emerge. These are just a few that will help you on your way to establishing your business.
How long does it take to get an EIN?
When applying online, you can receive your EIN instantly. As long as your information is correct when inputting data into the IRS EIN Online Assistant, you will receive your EIN by the end of your session.
Applications submitted by fax take approximately 4 business days. Once your application is approved, the IRS will send your EIN to the fax number you used to submit the application.
The Internal Revenue Service does not supply a timeline for mailed-in EIN applications. However, they do state, “If it is determined that the entity needs a new EIN, one will be assigned using the appropriate procedures for the entity type and mailed to the taxpayer.” It is common to wait anywhere from four to six weeks to receive your EIN by mail.
How much does it cost to get an EIN for an LLC?
Applying for an EIN for your LLC is free. There are absolutely no costs attached to receiving an EIN.
Does an LLC give you a tax ID number?
Forming an LLC does not automatically give you a tax ID number. If you decide that you would like or need an EIN for your LLC, you will need to follow the steps listed above to apply for one through the Internal Revenue Service.
Can I get an EIN before an LLC?
There are only two states where you can apply for an EIN prior to forming your LLC: Louisiana and West Virginia. In both states, you will first need to confirm that your LLC name is available, then apply for your EIN prior to filing your remaining documents with the state.
For the remainder of the United States, you first need to form your LLC and then apply for an EIN. The IRS will not issue a tax ID number for LLCs that have not already been approved by your respective Secretary of State.