What is it?
The IRS assigns an employer identification number (EIN) and uses it to determine the tax accounts of employers and some certain exceptions who may not have employees. It is necessary to pay federal taxes, hire employees, apply for business licenses and permits, and open a business bank account. The IRS uses your EIN to decide whether or not you are required to file a business tax return. When used for identification rather than employment tax reporting, it can be called the Taxpayer Identification Number (TIN) or Federal Employer Identification Number (FEIN). It is like a taxpaying fingerprint that reduces the likelihood of your business being misidentified for another. The EIN is used for tax administration and no other purpose. For example, an EIN cannot be used in tax lien auctions or sales, lotteries, and other purposes not related to tax administration.
Do you need an EIN for your California business?
An EIN has required if your business has any of the following:
- Your California business operates as a corporation or partnership
- Files tax returns for employment, excise, alcohol, firearms, and tobacco
- Withholds taxes on income, other than wages, paid to a non-resident alien
- Uses a Keogh Plan (retirement account for self-employed workers and business owners)
- Involvement with certain types of organizations including, but not limited to: estates, non-profit organizations, and plans administrators.
See here for additional information.
How to Apply?
It is free to apply for an EIN, and you should file for one before you register your business. There are several options for applying including online, via fax, via mail, or by phone.
Online is preferred as it is the fastest method to receive your EIN. If the "responsible party" (see below for additional information) is an entity with an EIN previously obtained online, the applicant needs to use a different application method. The application is available Monday- Friday from 7 a.m. to 10 p.m. Eastern time. Once the information is reviewed after submission, an EIN is issued immediately. The online application is open to all entities whose business, office or agency, or legal residence is located in the United States or U.S. territories. International applicants are required to apply via the following methods. Click here to apply online now if eligible.
Apply by Fax
Taxpayers can also complete Form SS-4 and send it to the
corresponding fax number, depending on their business location.
A fax will be sent back with the EIN within four business days if the information on the form is validated.
Apply by Mail
Taxpayers can also submit Form SS-4 via mail. The application is expected to take four weeks to process, and if determined that the applicant needs a new EIN, one will be assigned and mailed to the taxpayer. For those who are filing for an EIN in California, send your application to the address below.Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
Apply by telephone- International Applicants
Applicants whose principal business, office or agency, or legal residence is located outside the United States can call 267-941-1099 (not a toll-free number) Monday to Friday from 6 a.m. to 11 p.m. Eastern time to obtain their EIN. The person calling must be authorized to receive the EIN and be prepared to answer questions concerning Form SS-4.
Other important info:
Daily Limitation of EIN
The IRS will limit EIN issuance to one daily per responsible party. This limitation applies to all EIN methods, whether online, fax, or mail.
Regardless of the EIN application method, you must provide the owner, trustor, general partner, or true principal officer's name and taxpayer identification number (SSN, ITIN, or EIN). This individual will be responsible for controlling, managing, or directing the applicant entity and the disposition of its funds and assets and will be referred to as the "responsible party" by the IRS. The responsible party is typically an individual, and the only exception is if they are a government entity.
Provided temporary authority to act on behalf of entities during the entity's formation. They are NOT considered the true "responsible party" and are NOT authorized to obtain EINs. All EIN applications (mail, fax, electronic) need to be completed with the name, taxpayer identification number, and signature of the responsible party. To correct business information where a nominee was used, complete Form 8822-B and send it to the address that applies to you.
EIN expiration/ cancellation
EINs don't expire, and once issued to an entity, another business can never recycle them. The only way to cancel an EIN is if it is determined that you don't require one after already having received one. For instance, if the business an EIN was filed for never started up, a request can be sent to the IRS to close your business account.
To proceed with closing a business account send a letter that includes the complete legal name of the entity, the EIN, business address, and reason for closing. Also, include the EIN assignment notice if that was issued when the EIN was assigned. Send the documents to the following address:Internal Revenue Service
Kansas City, MO 64108
Internal Revenue Service
Ogden, UT 84201
If the business dissolves, the EIN will become inactive, closing your account with the IRS. There is no need to take additional steps to cancel your EIN.
Report Business Changes
If there are changes to your business, including location or business name, a new EIN is unnecessary. Simply file the IRS form 8822 B for business address changes or IRS form 8832 for business structure changes.
If you were assigned an EIN but forgot it, you can locate it through any of the following actions:
- Locate the EIN assignment notice received when you applied for and received the number.
- Contact financial institutions where you used your EIN to open accounts or apply for a loan
- Reach out to state or local agencies where you may have applied for licensing. They should have your EIN on file.
- Locate any tax returns filed under your EIN. The EIN will be listed on these documents.
- Finally, you can call 800-829-4933, the IRS business and Specialty Tax Line. Hours of operation are 7 a.m. to 7 p.m. Monday to Friday Eastern time. If you are a "responsible party" as defined above, the IRS should be able to provide the EIN to you when you provide identifying information to prove your authorization.
If you have any additional questions, please contact 800-829-4933, the IRS Business and Specialty Tax Line.