How to get an EIN for your LLC: free, online, in about 15 minutes

An employer identification number, or EIN, is your business's federal tax ID. It's to your LLC what a Social Security number is to you: the IRS uses it to track the business's tax filings, banks ask for it to open an account, and payroll can't run without one.

Getting one is free and, for most US owners, takes about 15 minutes online. The hard part isn't the form. It's avoiding the handful of mistakes that are painful to fix later, and knowing what to do if the online route isn't open to you.

Who needs an EIN

The IRS says you need an EIN if you have employees, if you pay employment, excise or alcohol, tobacco and firearms taxes, or if you withhold tax on non-wage income paid to a nonresident alien. It also lists the kinds of entities that need one, including partnerships, corporations and LLCs.

In practice, almost every LLC gets one. A single-member LLC with no employees can sometimes report its income under the owner's Social Security number, but banks, payment processors and many clients will ask for an EIN anyway. It also keeps your SSN off invoices and W-9 forms. The IRS notes that even if you don't need an EIN for federal tax, you can request one for banking or state tax purposes.

Sole proprietors are the one group that often doesn't need an EIN. If you freelance under your own name with no employees and no retirement plan, you can report income under your SSN. Many freelancers get one anyway, for the same privacy reason: clients ask for a taxpayer ID on Form W-9, and an EIN lets you give them a number that isn't your Social Security number. It costs nothing. If you later form an LLC, the new company will often need its own EIN rather than reusing yours, so ask your accountant when you make the switch.

Apply after the state approves your LLC

The EIN application asks for your business's legal name exactly as it appears in your state filing, and the date the business started. Apply after the state has approved your articles of organization, so the name and date match what's on record. Applying first, then changing the name, creates a mismatch that banks and the IRS will both notice.

If you haven't formed the LLC yet, our guide to starting an LLC covers that first.

What to have ready

The application takes about 15 minutes if you have everything in front of you, and it can't be saved part-way. Gather these first.

• The LLC's legal name and any trade name, exactly as filed with the state.
• The responsible party's name and SSN or ITIN. The responsible party must be a person, not a company: the owner or someone who controls the business and its funds.
• The number of members. This decides whether the IRS treats the LLC as a disregarded entity (one member) or a partnership (two or more).
• The business's physical address, and a mailing address if different.
• The state where the LLC was formed and the date it started.
• Your main business activity, such as consulting, retail or construction.
• Whether you expect to hire employees in the next 12 months, and roughly how many.

Applying online, screen by screen

The IRS online application is open Monday to Friday from 6 a.m. to 1 a.m. the next day, Saturday from 6 a.m. to 9 p.m., and Sunday from 6 p.m. to midnight, Eastern time. It walks you through these screens.

1. Type of entity. Choose "Limited Liability Company (LLC)."
2. Members and state. Enter how many members the LLC has and the state where it was formed. For an LLC, the IRS will confirm its default tax treatment based on the member count.
3. Reason for applying. Choose "Started a new business" for a new LLC. The other options cover hiring employees, banking needs and changes to an existing business.
4. Responsible party. Enter the person's name and SSN or ITIN.
5. Addresses. The business's physical address and, if different, where you want mail sent.
6. Business details. The legal name, start date, main activity and expected employees.
7. Confirmation. Review everything, then submit.

The EIN appears on screen as soon as the application is accepted. Download or print the confirmation letter right away. It's your proof of the number, and banks often ask for it.

The limits worth knowing

• One session, 15 minutes idle. The application expires after 15 minutes of inactivity, and you can't save it and come back.
• One EIN per responsible party per day. If you are setting up several companies, space the applications out.
• SSN or ITIN required online. Without one, use fax, mail or phone.

Mistakes that cause trouble later

Most EIN problems come from a few wrong answers that look harmless at the time.

• The wrong entity type. Choosing "sole proprietor" for an LLC, or the wrong number of members, sets up the wrong tax treatment. Fixing it means letters to the IRS, not a quick edit.
• A name that doesn't match the state filing. Use the exact legal name, including "LLC." A trade name goes in the separate trade-name field.
• Applying twice. If something goes wrong and you aren't sure the first application went through, don't immediately apply again. You'll end up with two EINs and a mess to untangle. Check the confirmation letter or call the IRS first.
• Listing a company as the responsible party. It must be an individual.

Applying by fax or mail with Form SS-4

If you can't apply online, fill in Form SS-4 and send it to the IRS.

• By fax, you will generally get your EIN back within about 4 business days. US applicants fax 855-641-6935.
• By mail, it takes about 4 weeks. US applicants mail to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.

Form SS-4 has a third-party designee section. If an accountant or formation service applies for you, they sign there, and the IRS gives them the number.

If you live outside the US

Founders with no legal residence, office or place of business in the US can't use the online application without an SSN or ITIN, but they have two good options.

• Phone. Call 267-941-1099, Monday to Friday, 6 a.m. to 11 p.m. Eastern time. An IRS agent completes the application with you and can give you the number on the call.
• Fax. International applicants fax 855-215-1627 from within the US or 304-707-9471 from outside it.

Many international founders let a formation service handle the EIN, because calling the IRS from abroad during US hours is awkward. That's one of the few cases where paying for it saves real effort. Our guide to starting a US company from abroad covers the rest of the process.

Should you pay someone to get it?

Usually not. Websites that charge $50 to $300 "for your EIN" are filling in the same free IRS form. The IRS itself warns about sites that charge for an EIN and says you never have to pay a fee for one.

Paying makes sense in two situations: when no owner has an SSN or ITIN and you don't want to deal with fax or phone, and when an accountant is already setting up your payroll and tax accounts and can apply as your designee in the same step.

After you have the number

1. Save the confirmation letter somewhere you'll find it in five years.
2. Open your business bank account. Most banks want the EIN, the confirmation letter, your articles of organization and ID. Our guide to opening a business bank account covers the rest.
3. Register with your state for any state taxes that apply, such as sales tax or payroll withholding.
4. Give it to clients on Form W-9 instead of your SSN.

If your business later changes its address, its location or its responsible party, tell the IRS on Form 8822-B. Changes of responsible party must be reported within 60 days.

If you lose your EIN

Look first in the places it's likely to be: the confirmation letter, your bank account documents, and any tax return or payroll filing the business has made. If you still can't find it, call the IRS Business and Specialty Tax Line at 800-829-4933, Monday to Friday, 7 a.m. to 7 p.m. local time. Once they confirm you're authorized, they can tell you the number and send Letter 147C, which confirms the EIN assigned to your business.

The checklist

1. Wait for the state to approve your LLC.
2. Gather the legal name, the responsible party's SSN or ITIN, and the details above.
3. Apply online during the IRS's hours, in one sitting.
4. Download the confirmation letter.
5. Open the bank account and register for state taxes.

Once the EIN and bank account are in place, the next decision is how the LLC will be taxed. Most owners stay with the default for a while, and our guide to when to elect S corp status explains when that changes.