How to Get an EIN for Free From the IRS

Once you have formed your business entity, one of the next steps in building a strong business foundation is obtaining an Employer Identification Number, better known as an EIN.

An EIN is one of the most important identifiers your business may use. You may need it for taxes, banking, hiring employees, business applications, and other financial or administrative purposes.

The best part?

Getting an EIN directly from the IRS is completely free.

As part of the LivingRGV Business Foundation Series, we’re going to explain what an EIN is, why your business may need one, and how to get yours directly from the IRS without paying an unnecessary third-party fee.

What Is an EIN?

An Employer Identification Number is a nine-digit federal tax identification number issued by the Internal Revenue Service.

You may also hear it called a:

• Federal Employer Identification Number
• Federal Tax ID
• Federal Tax Identification Number
• FEIN

These terms generally refer to the same nine-digit identifier.

The IRS assigns EINs to employers, corporations, partnerships, sole proprietors, trusts, estates, and certain other entities for federal tax filing and reporting purposes.

Think of it as one of the primary identification numbers associated with your business for federal tax purposes.

Does an EIN Cost Money?

No.

The IRS issues EINs directly to eligible applicants for free.

The IRS specifically warns business owners that they never have to pay a fee to obtain an EIN and cautions against websites that charge people simply to submit an EIN application.

That makes this one of the easiest places for a new business owner to save money.

There are companies that offer EIN filing assistance as a paid convenience service. That does not necessarily mean those companies are doing anything improper, but understand what you are buying.

If you are comfortable completing the IRS application yourself, you can obtain your EIN directly from the government without paying a service fee.

Where Should You Apply?

Our LivingRGV recommendation is simple:

Apply directly through the IRS.

Use the official IRS EIN application available through IRS.gov.

The IRS currently offers an online EIN application that can issue an EIN immediately when an eligible application is successfully completed and approved.

If you have just formed an LLC or corporation, make sure your business formation is completed before applying for the EIN.

That allows you to use the correct legal business information on the EIN application.

Who Needs an EIN?

Not every person earning self-employment income necessarily needs an EIN, but many businesses do.

EINs are commonly associated with businesses that:

• Have employees
• Operate as corporations
• Operate as partnerships
• Have certain federal tax filing requirements
• Maintain certain retirement, trust, estate, nonprofit, or other qualifying structures

Even in situations where a business owner may not be legally required to obtain an EIN, there can be practical reasons to have one depending on the business structure and how the company operates.

Because tax situations vary, business owners should verify their individual requirements with the IRS or a qualified tax professional.

Do You Need Employees to Get an EIN?

Despite the name Employer Identification Number, having employees is not the only reason a business might have an EIN.

The IRS issues EINs to a variety of entities, including sole proprietors, corporations, partnerships, trusts, estates, employers, and certain other organizations.

So don't assume an EIN only becomes relevant when you hire your first employee.

Why Is an EIN Important for a New Business?

An EIN can become part of several later stages in building your business.

Depending on the institution and your business structure, it may be requested when you:

• Open a business bank account
• File federal business tax returns
• Hire employees
• Apply for certain business licenses
• Work with vendors
• Complete business financial applications
• Establish accounts under your business entity

It also gives your company a federal tax identifier separate from simply using your personal Social Security number for every business-related purpose.

An EIN by itself, however, does not create business credit.

That distinction is important.

Getting your EIN is a foundational step. Building a business credit profile requires additional activity, which we will cover later in the LivingRGV Business Roadmap.

What Should You Have Ready Before Applying?

Before starting your EIN application, have your business information organized.

Depending on your situation, you may need information such as:

• Legal business name
• Trade name or DBA, if applicable
• Business mailing address
• Entity type
• Date the business started or was acquired
• Reason for applying
• Principal business activity
• Information about the business's responsible party
• Taxpayer identification information for the responsible party

The IRS requires applicants to identify a responsible party for the entity.

According to the IRS, the responsible party is generally the individual who owns, controls, or exercises effective control over the entity and its assets. Except for government entities, the responsible party generally must be an individual rather than another company.

Complete the Application in One Sitting

This is an important detail if you're using the IRS online application.

The IRS currently requires the online EIN application to be completed in one session.

You cannot save the application and return to it later.

The session also expires after 15 minutes of inactivity, which means you would need to restart if you leave the application inactive too long.

That's another reason to have your business information ready before you begin.

What Happens After You Apply?

If your online EIN application is approved, the IRS says it can issue the EIN immediately online.

You should then save or print your EIN confirmation letter for your business records.

Treat that document like an important company record.

You may need your EIN repeatedly throughout the life of the business, so don't rely on remembering the number or leaving the only copy in an old email or download folder.

Consider storing the confirmation with your other important business records, including:

• Certificate of Formation
• Operating agreement
• Banking documents
• Tax records
• Business licenses
• Insurance documents
• Business credit information

Don't Apply for Multiple EINs by Accident

A new business owner may sometimes think that applying again is the easiest solution if something goes wrong.

Be careful.

The IRS currently limits EIN issuance to one EIN per responsible party per day, regardless of whether the request is made online, by mail, fax, or another permitted method.

More importantly, your business generally should not be creating unnecessary EINs.

If you already have one and simply cannot find it, your first step should be trying to recover the existing EIN rather than automatically applying for another.

Do You Need a New EIN if Your Business Changes?

Not always.

The IRS says that whether you need a new EIN generally depends on changes to the ownership or structure of the business.

Simply changing a business name or address does not, by itself, generally require a new EIN.

For example, converting from one type of business entity to another may create different EIN requirements than simply moving your office.

Always check the IRS requirements when making a major ownership or entity change.

What if Your Business Address or Responsible Party Changes?

Keeping your EIN records current is important.

The IRS uses Form 8822-B to report certain changes involving a business's address, location, or responsible party.

The IRS states that changes to the responsible party must generally be reported within 60 days.

This is another reason we emphasize consistency throughout the LivingRGV Business Foundation Series.

Your business records should stay organized as your company grows.

Beware of EIN Websites That Look Official

When searching online for things like:

“Get EIN”

or

“Apply for EIN”

you may encounter private businesses offering to handle the application for you.

Some may charge significant service fees.

Before entering your information, check the website carefully.

If your goal is simply to obtain your EIN yourself, go directly to IRS.gov.

The IRS explicitly says you never have to pay a fee to obtain an EIN.

A website charging you is charging for its assistance or convenience—not for the EIN itself.

Should You Pay Someone to Get Your EIN?

For many straightforward small businesses, probably not.

The IRS online process was specifically built to allow eligible business owners to apply directly.

There may be circumstances where someone prefers professional assistance, particularly when dealing with complicated entity, ownership, tax, or international issues.

But don't pay for a basic EIN application simply because you believe the government charges for an EIN.

It doesn't.

This is exactly why we're creating the LivingRGV Business Foundation Series.

We want business owners to know which services genuinely cost money and which important resources are already available to them for free.

EIN vs. D-U-N-S Number: What's the Difference?

These two numbers are easy for new business owners to confuse.

Your EIN is issued by the IRS and is used primarily as a federal tax identification number.

A D-U-N-S Number is associated with Dun & Bradstreet and helps identify a business within D&B's commercial information and business credit ecosystem.

They serve different purposes.

Getting your EIN does not automatically establish your Dun & Bradstreet business credit profile.

That is why they are separate steps in the LivingRGV Business Foundation Roadmap.

EIN vs. Social Security Number

Your Social Security number identifies you personally.

An EIN identifies your business or other qualifying entity for federal tax purposes.

Depending on your business structure and situation, there may be circumstances where a sole proprietor uses a Social Security number for certain tax purposes.

However, once you create a separate entity or meet other EIN requirements, your business may need its own federal tax identification number.

The right answer depends on how your business is structured, so don't choose an entity or tax treatment solely based on something you read online.

What Comes After Your EIN?

Once your business entity is established and you've received your EIN, the next steps in the LivingRGV Business Foundation Roadmap begin building out the rest of your company's identity and financial foundation.

Our roadmap continues with:

1. Form your LLC or corporation
2. Get your EIN
3. Get or locate your D-U-N-S Number
4. Begin monitoring your business credit
5. Open a dedicated business bank account
6. Establish your business address
7. Set up your website and professional domain email
8. Create and verify your Google Business Profile

Eventually, we will move beyond the Foundation stage and cover vendor tradelines, business credit monitoring, business credit cards, and preparation for financing.

Get Your EIN Directly From the IRS

If you're ready for this step, our recommendation is straightforward:

Use the official IRS EIN application and apply directly.

Cost: Free
Official Provider: Internal Revenue Service
Best Time to Apply: After establishing your legal entity, when applicable
LivingRGV Recommendation: Don't pay a third party unless you specifically want assistance with the application.

Save your confirmation when you're finished.

Then you're ready to move on to the next piece of your business foundation.

Next in the LivingRGV Business Foundation Series: How to Get or Find Your D-U-N-S Number and Establish Your Dun & Bradstreet Business Profile

LivingRGV provides general educational business information. Nothing in this article should be considered legal, tax, accounting, lending, or financial advice. Business and tax requirements vary based on entity type and individual circumstances. Consult the IRS or a qualified professional when determining the requirements for your business.