FREQUENTLY ASKED QUESTIONS
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used as identification for a business entity. Generally, businesses need an EIN. Employer identification numbers are issued for the purpose of tax administration and are not intended for participation in any other activities (e.g., tax lien auction or sales, lotteries, etc.)
If you answer yes to any of the following questions, you need an EIN Number:
- Do you have employees?
- Do you operate your business as a corporation or partnership?
- Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
- Do you withhold taxes on income, other than wages, paid to a non-resident alien?
- Do you have a Keogh plan?
- Are you involved with any of the following types of organizations?
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers’ cooperatives
- Plan administrators through the internet.
Typically, a business needs a new EIN when their ownership or structure has changed. Although changing the name of your business does not require you to obtain a new EIN. You will be required to obtain a new Tax ID Number if any of the following statements are true.
- You are subject to a bankruptcy proceeding.
- You incorporate your business.
- You operate as a partnership.
- You purchase or inherit an existing business that you operate as a sole proprietorship.
- A corporation receives a new charter from the secretary of state.
- You are a subsidiary of a corporation using the parent’s EIN or you become a subsidiary of a corporation.
- You change to a partnership or a sole proprietorship.
- A new corporation is created after a statutory merger.
- You incorporate.
- Your partnership is taken over by one of the partners and is operated as a sole proprietorship.
- You end an old partnership and begin a new one.
Limited Liability Company
- A new LLC with more than one owner (Multi-member LLC) is formed under state law.
- A new LLC with one owner (Single Member LLC) is formed under state law and chooses to be taxed as a corporation or an S corporation.
- A new LLC with one owner (Single Member LLC) is formed under state law, and has an excise tax filing requirement for tax periods beginning on or after January 1, 2008 or an employment tax filing requirement for wages paid on or after January 1, 2009.
- A trust is created with funds from the estate (not simply a continuation of the estate).
- You represent an estate that operates a business after the owner’s death.
- One person is the grantor of many trusts.
- A trust needs to be change to an estate.
- The Type of trust you applied for needs to be changed.
Anyone needing an EIN for the following:
- Individuals/Sole Proprietors
- Limited Liability Companies (LLC)
- Other employers and business entity types
The only restrictions are:
- The primary address must be in the United States.
- The owner, principal officer, trustor, grantor, etc. must have a valid Taxpayer ID Number (Social Security Number, Individual Taxpayer ID Number, or Federal Tax ID) to enter on the form.
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