What's an Employer ID (EIN)?
Every foreign owned company needs an EIN. Banks require it and the IRS requires for filing form 5472. This rule applies for all Limited Liability Companies and Corporations. People also call them:
- Employer Identification Number (EIN)
- Federal Employer Identification Number (FEIN)
- Employer ID
- Federal Tax Identification Number (FTIN)
- Federal Tax ID
Does the IRS Require an EIN?
For non-residents, the Internal Revenue Service will always require an EIN. This if for annual filings, plus it's needed to:
- Have Employees
- Have More Than One Member
- If You're a Corporation or Partnership
- Open a Business Bank Account
- When You File Income or Excise Taxes
An EIN is also important for asset protection. It allows you to open a business bank account and prevents comingling of funds, i.e. when your personal business funds are in the same account it becomes hard for the court to protect just your business assets.
A DBA or Sole-Prop doesn't have a corporate veil, but keeping revenue and expenses separate from your personal account makes it easier to run the company. You can see what the company is earning or losing, and makes it easier in case you want to sell the company.
Required Information for EIN
The SS4 document must be complete when you fax it, otherwise the IRS will fax the application back with a rejection notice. Most required information is on the Certificate or Articles provided by the state:
- The Responsible Party
- Name of the Company
- Mailing Address
- Type of Entity, e.g. LLC, Corporation, DBA...
- Date of Formation
- Reason for Applying, e.g. will have employees
- Expected Number of Employees & First Date Paying Them
- Industry & Specific Line of Business
In addition to the above, please also keep in mind:
- The IRS is open from 7 AM to 10 PM EST
- They are not open on holidays
- There is maintenance around the New Year
- The responsible party may only obtain 1 FEIN per day
- You cannot change the responsible party, company name or address online
- The SS4 will be faxed back and CP 575 G will be mailed
How to Apply for a Free EIN
The best way for a non-resident to apply for an EIN is to fax an SS4 application in. You can mail in the SS4, but this only makes the process longer given mailing time. Only those with a SSN or ITIN can apply online.
If you are faxing the SS-4, here is the form.
Once faxed, the SS-4 will be faxed back and the CP 575 G will be mailed to your business address. If we receive it, then we scan it to your client portal and email you a notification. The application can take from 3 days to 4 weeks, depending on the time of year, e.g. whether it's tax season or a national holiday.
Step-by-Step Guide to Complete the SS4
- Go to the FEIN Application
- Box 1: Enter the Company's Full Name
- Box 2: Enter the DBA or Trade Name (if there is one)
- Box 3: Not Needed for Companies
- Box 4a: Enter Company's Mailing Address (We Provide this Free of Charge)
- Box 4b: Enter City, State & Zip
- Box 5a: Ignore
- Box 5b: Ignore Box 7a: Enter The Responsibly Party's Name Box 8a: Select "Yes" if an LLC or "No" if a Corporation Box 8b: If an LLC, Enter the Number of Owners Box 8c: If an LLC, Mark "Yes" Box 9a: Choose "Partnership" if an LLC or "Corporation" if a Corporation Box 9b: If Corporation, Then Enter Company's State of Formation Box 10: Check "Started New Business" and write in "LLC" or "Corporation" Box 11: Enter Formation or Incorporation Date Box 12: Most Clients Enter "December", but Consult With an Accountant First Box 13: Enter Number of Anticipated Employees Box 14: Check if Less Than $5,000 in Annual Wages Box 15: Enter First Date Wages Will be Paid Box 16: Choose Your Industry, or Choose "Other" if None Apply Box 17: Write a Short Description of Your Products and/or Services Box 18: Choose "No" Since this is a New Entity Now enter your name, title and sign the bottom. You should also include a phone and fax number for future correspondences. Since you are filing yourself, the third party designee section is not needed and can remain blank.