What is an EIN?
A clear, plain-English explanation of the Employer Identification Number and what it's used for.
Direct answer
An EIN (Employer Identification Number) is a unique nine-digit number issued by the IRS to identify a business for federal tax purposes. Think of it as a Social Security number, but for your business. It's free to obtain directly from the IRS.
Simple explanation
When the IRS or a bank needs to identify your business, they use the EIN. It appears on tax filings, payroll forms, business bank accounts, and many state and local registrations. It does not expire, and a business keeps the same EIN for its entire life unless its structure fundamentally changes.
How an EIN gets used in practice
- 1
Filing federal business taxes
Your EIN appears on the business's federal tax return and most related filings.
- 2
Opening a business bank account
Banks require an EIN (or sometimes an SSN for sole proprietors) to open a business account.
- 3
Hiring and paying employees
Payroll, W-2s, and employment tax filings all reference the EIN.
- 4
Applying for licenses and permits
Many state and local agencies ask for your EIN during registration.
Summary
- •An EIN is a nine-digit federal tax ID for your business.
- •It's free directly from the IRS — beware of paid lookalike sites.
- •You'll need it for taxes, banking, payroll, and many registrations.
- •The official application is IRS Form SS-4. Get it from IRS.gov.