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Employer Identification Numbers

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Transcript for Employer Identification Numbers

This is Jean Wetzler for the Small Business/Self-Employed Division.

I'm talking today with Cheryl Sherwood, IRS Director of Campus Compliance Services.

Cheryl, what is an EIN and how does a small business owner know if one is needed?

An employer identification number, or EIN, is a federal tax identification number for a business.

Generally, if you operate your business as a corporation or partnership, or if you have employees, you need an EIN.

I'm a small business owner, how do I apply for an EIN?

You can apply for an EIN from the IRS by phone, fax or mail, but the fastest and easiest way to get one is to apply online.

Most small businesses can apply for an EIN right on the IRS Web site.

You'll need to provide a valid taxpayer identification number, such as a Social Security number, when you apply.

We validate the information you enter into the system and in most cases, you'll receive your EIN immediately.

If you apply by mail, it takes approximately four weeks to assign and deliver your EIN, so the online application is not only safe and secure, it's also much quicker.

How soon can I begin using a new EIN?

You can begin using your new EIN immediately for most of your business needs, such as opening a bank account, applying for business licenses and filing a tax return by mail.

However, no matter how you applied for the EIN - even online - it can take up to two weeks before your EIN becomes part of the IRS' permanent records.

So wait until this occurs before filing an electronic return or making an electronic payment.

What should I do if I need to file a return or make a payment before this happens?

If you don't have your EIN by the time a tax return is due, do not use your Social Security number on the return.

Simply write the words APPLIED FOR and the date you applied in the space where the number normally goes.

If you have a deposit due, send in your payment using the name you used to apply for the EIN, the address, kind of tax, the tax period covered, and the date you applied.

Then once I have my EIN, how do I get started making electronic tax deposits?

Based on the information on your application, or if you indicate you'll have employees, you'll be automatically enrolled in the EFTPS, the Electronic Federal Tax Payment System.

Within a few days after applying for your EIN, you will receive an EFTPS confirmation package in the mail.

The package includes your EFTPS enrollment confirmation, your personal identification number - your PIN - and complete instructions for making electronic tax payments online or by phone.

EFTPS is a free service provided by the U.S. Department of the Treasury.

Cheryl, where can small business owners get help and information?

If you have questions, our Web site probably has the answers.

Go to IRS.gov and type EIN in the Search box.

If you need help, just call our business and specialty hotline at 1-800-829-4933.

Thank you.

We've been talking with Cheryl Sherwood, Director of IRS Campus Compliance Services.

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