An LLC is required to have an Employer Identification Number (EIN) in some situations, but not every LLC needs one.
For federal tax purposes, the answer usually depends on the LLC's number of members, employees, and tax classification.
When Must an LLC Have an EIN?
An LLC generally must have an EIN if it has multiple members, hires employees, elects corporate tax treatment, or has certain federal tax filing obligations.
| LLC situation | Is an EIN required? |
|---|---|
| Single-member LLC with no employees and default federal tax treatment | Usually no |
| Single-member LLC with employees | Yes |
| Single-member LLC taxed as an S corporation or C corporation | Yes |
| Multi-member LLC taxed as a partnership | Yes |
| LLC filing employment, excise, or certain other federal tax returns | Yes |
| LLC required by a bank or state agency to provide an EIN | Usually yes for that purpose |
A Multi-Member LLC Generally Needs an EIN
A domestic LLC with two or more members is generally treated as a partnership for federal income tax purposes unless it elects to be taxed as a corporation. The LLC uses its own EIN for federal tax reporting.
An LLC With Employees Needs an EIN
An LLC must obtain an EIN when it hires employees and has employment tax obligations. A single-member LLC that is disregarded for income tax purposes must use the LLC's legal name and EIN for employment tax reporting.
An LLC Taxed as an S Corporation or C Corporation Needs an EIN
A single-member LLC normally receives disregarded-entity treatment for federal income tax purposes. The LLC must obtain an EIN if it elects to be taxed as a corporation, including an S corporation.
When Does a Single-Member LLC Not Need an EIN?
A single-member LLC generally does not need a separate EIN when all of these conditions apply:
- It has one owner.
- It has no employees.
- It does not owe or file applicable excise taxes.
- It has not elected to be taxed as a corporation.
In this situation, the IRS generally treats the LLC as a disregarded entity for federal income tax purposes. The owner usually reports the business activity on a federal tax return, such as Schedule C, Schedule E, or Schedule F.
For example, a freelance designer who forms a single-member LLC, has no employees, and reports business income on Schedule C may not be required to obtain an EIN for federal income tax purposes.
Should a Single-Member LLC Get an EIN?
Usually, yes. Even when federal tax rules do not require an EIN, getting one can make the business easier to operate.
A bank may request an EIN before opening a business checking account. A state tax authority or licensing agency may also require one. The IRS allows a single-member LLC to obtain an EIN voluntarily for banking or state tax purposes.
An EIN can also reduce the need to use your personal Social Security number on some business forms. For a single-member LLC that remains a disregarded entity, though, the owner's taxpayer identification number is generally used for federal income tax information reporting. The LLC's EIN is used for employment tax and certain excise tax requirements when applicable.
What Is the Difference Between an EIN and a State Tax ID?
An EIN is a federal tax identification number issued by the Internal Revenue Service. It is different from:
- A state employer tax number
- A state sales tax permit
- A business license
- The LLC's articles of organization
- The owner's Social Security number
Forming an LLC with a state does not automatically create an EIN. The owner must apply for the EIN separately through the IRS.
State registration and tax rules vary. Check with the state revenue department and secretary of state for any additional requirements.
How Do You Get an EIN for an LLC?
The IRS issues EINs for free. If the LLC was formed in the United States and the responsible party has an SSN or ITIN, the online application can usually provide the EIN immediately after approval.
Apply in This Order
- Form the LLC with the state first.
- Gather the LLC's legal name, formation date, business address, ownership details, and tax classification.
- Identify the responsible party, usually the person who owns or controls the business.
- Apply through the IRS EIN application or file Form SS-4.
- Save the EIN confirmation notice with the company's permanent records.
The IRS advises forming the LLC through the state before applying for an EIN. The online IRS application is free, so paying a third-party website to obtain the EIN is unnecessary.
Does an LLC Need a New EIN Later?
An LLC may need a new EIN when its ownership or federal tax structure changes. For example, the IRS lists terminating an existing LLC and forming a new corporation or partnership as a situation that may require a new EIN.
A business name or address change generally does not require a new EIN. Changing an LLC's tax election to an S corporation also does not automatically require a new EIN if the existing entity remains the same. A single-member LLC making a corporate tax election may still need to obtain an EIN.
Bottom Line
An EIN is free to obtain. Form the LLC with the state first, apply directly through the IRS, and keep the confirmation notice with the company's permanent records.