What Is an EIN? How to Get One and When You Need It
An EIN is the federal tax ID for a business. Who needs one, how to apply for free, the one-per-day limit, and how to replace a lost CP 575.
What Is an EIN?
The nine digits every business with a payroll needs: what an EIN is and how it differs from the other numbers with similar names, who has to have one, how to get it free in an afternoon, the limit that stops you applying twice in a day, and what to do when the confirmation letter you can never get reissued has gone missing
An EIN takes about fifteen minutes to obtain, costs nothing, and is the single cheapest piece of business administration there is. It also has three properties that catch people out, and all three of them show up at the worst possible moment.
You can only get one per day per responsible party. The confirmation letter is issued exactly once and is never reissued. And the name it identifies is not the same category of thing as the numbers with similar names, which is why forms asking for a taxpayer identification number cause so much hesitation.
This covers what an EIN actually is, how it differs from the other identifiers, who has to have one, how to get it without paying anybody, and what to do when the paperwork has vanished. I build the people and records tooling for businesses without an HR department at FirstHR, and FirstHR is an onboarding and HR platform rather than a payroll provider. This is general information, not tax advice.
What an EIN Is
An EIN is a nine-digit number the IRS assigns to a business or other entity to identify it for federal tax purposes. It is also called a federal tax identification number, and it does for a business what a Social Security number does for a person (Internal Revenue Service).
The word employer in the name is misleading and causes real confusion. Plenty of entities that will never have an employee need an EIN, including single-member LLCs opening a bank account, estates, trusts, and non-profits. Having one does not mean you are an employer, and it does not create any obligation by itself.
It is also not a state registration. A federal EIN gets you nothing at state level, and the withholding and unemployment accounts you need in order to actually run payroll are separate applications with separate numbers, in every state where you have somebody working.
TIN vs EIN vs SSN
These three get used interchangeably and only two of them are numbers. Getting the relationship straight resolves most of the hesitation people feel when a form asks for a taxpayer identification number.
The practical consequence shows up on Form W-9, which asks for a taxpayer identification number and expects a specific one depending on the entity type. An individual who enters an EIN, or a corporation that enters a Social Security number, has produced a name and number pair that will not match IRS records, and the mismatch surfaces months later as a notice.
None of this is related to the internal employee numbers a business assigns for its own records, which are a purely administrative convenience with no tax meaning at all.
Who Needs One
The requirement attaches to what the business does rather than to its size. Any one of the following is enough on its own.
| Situation | EIN required? | Note |
|---|---|---|
| You have or are hiring employees | Yes | Payroll tax returns are filed under it and state registration usually asks for it |
| You operate as a corporation or a partnership | Yes | The entity type alone triggers it, employees or not |
| You file employment, excise, or certain other returns | Yes | The filing obligation is what creates the requirement |
| You sponsor a retirement plan | Yes | Plan reporting is filed under the employer number |
| You are a sole proprietor with no employees | Usually not | Your own Social Security number can serve, though many get one anyway |
| You are a single-member LLC with no employees | Often not for tax, but frequently in practice | Banks and payment platforms commonly require one regardless |
| You pay contractors but have no employees | Not automatically | You may still want one to keep your Social Security number off every W-9 |
That last row is the reason a lot of one-person businesses apply when they technically do not have to. Without an EIN, every client who needs a W-9 receives your Social Security number, which then sits in an unknown number of filing systems you have no control over. Fifteen minutes of paperwork removes that permanently.
How to Get One
Apply directly with the IRS. It is free, the online application issues the number during the session, and no third party can obtain it faster because instantaneous is already the speed (About Form SS-4).
| Method | How long it takes | When you would use it |
|---|---|---|
| Online application | Immediate, within the session | The default for almost every domestic business |
| Fax | Around four business days | Where the online route is unavailable for your entity type |
| Four to five weeks | Rarely, and never when a deadline is involved | |
| Through a paid service | No faster, plus a fee | No practical advantage over applying yourself |
The One-Per-Day Limit
The IRS limits issuance to one EIN per responsible party per day, and the limit applies across every application method rather than only to the online route. It has been in force since May 2012 and it exists to stop bulk automated applications.
For most businesses it never comes up. It matters if you are standing up several entities at once, because it turns an afternoon of applications into a schedule, and it is worth knowing before you tell a bank or a landlord that you will have a number tomorrow.
The limit is per responsible party rather than per person applying, so genuinely separate entities with genuinely different responsible parties are not caught. Naming different responsible parties purely to get around the limit is not the same thing, and the responsible party is meant to be a real answer rather than a routing decision.
The Responsible Party
Every EIN application names a responsible party: the individual who ultimately owns or controls the entity, or who exercises effective control over it. It must be a natural person with their own taxpayer identification number, outside of narrow exceptions for government entities.
This is the field people fill in casually and then never revisit, which is where the trouble starts. The responsible party is the person the IRS writes to and, in practice, the person a bank calls when something needs verifying. When that person leaves the business, the number stays pointed at them until somebody updates it.
The same form reports a change of business address, which is the version people do remember, usually because post stops arriving. Adding the responsible party check to whatever routine already covers an address change is the cheapest way to stop this drifting.
CP 575 and Letter 147C
When the IRS assigns an EIN it sends a CP 575 notice confirming it, once, to the address on the application. That notice is not reissued. If it is gone, no amount of asking produces another one, and the replacement is a different document with a different name.
The reason this matters is that banks, payroll providers, and state agencies frequently ask for the confirmation letter rather than for the number, and a business owner who knows their EIN by heart can still be stuck. Knowing the 147C exists, and that it is the accepted equivalent rather than a second-best, turns a week of confusion into a phone call.
The lesson people take from this is usually the right one: save the CP 575 the day it arrives, in the place where the business keeps its formation documents rather than in the inbox of whoever happened to apply. It is one page and you will want it in three years.
When You Need a New One
An EIN belongs to an entity, not to a business name or an address, which is what decides whether a change requires a new number. Renaming or relocating generally does not. Changing what the entity fundamentally is generally does.
| Change | New EIN? | What you do instead |
|---|---|---|
| You change the business name | No | Report the change rather than reapplying |
| You move to a new address | No | Report it on the change of address form |
| A sole proprietorship incorporates | Yes | The corporation is a new entity |
| A sole proprietorship takes on a partner | Yes | A partnership is a different entity from a sole proprietorship |
| A partnership incorporates | Yes | Same principle, new entity |
| A single-member LLC keeps disregarded treatment | Often not | Confirm against current IRS guidance for your facts |
| The responsible party changes | No | Form 8822-B within 60 days |
The rows in the middle are where a small business most often gets it wrong, usually by continuing to file under the old number after incorporating because the bank account and the payroll setup already point at it. The correction is more work than the original application would have been, and it reaches into every return filed in between. The IRS sets out the full picture in Publication 1635.
Where You Actually Use It
Once you have the number it appears in more places than most owners expect, and consistency across them is what keeps the filings matching.
Keeping the number, the CP 575, and the state account numbers in one findable place is unglamorous and it is what makes the first audit, the first bank change, or the first payroll provider migration take an hour instead of a week. That records layer is the part FirstHR is built to carry alongside the employee file.
Where Small Employers Get This Wrong
Five patterns, and none of them are about the application itself.
Paying a service for something that is free is first, and it is the most common. The IRS route costs nothing and is instantaneous; a paid intermediary adds a fee and no speed.
Losing the CP 575 is second. It is issued once and never reissued, which almost nobody knows until the moment a bank asks for it.
Assuming a federal EIN covers state obligations is third. It does not. State withholding and unemployment registrations are separate and are what actually let you pay somebody legally in that state.
Continuing to file under the old number after an entity change is fourth. The number belongs to the entity, and incorporating creates a new one whether or not the bank account changed.
And leaving a departed founder as the responsible party is last. It is a 60-day obligation nobody meets, and it quietly routes IRS correspondence about your business to somebody who no longer works there. Adding it to the same checklist as an address change is all the fix requires.
Frequently Asked Questions
What is an EIN?
An EIN is an employer identification number: a nine-digit number the IRS assigns to a business or other entity to identify it for federal tax purposes. It is sometimes called a federal tax identification number, and it functions for a business roughly the way a Social Security number functions for an individual. You use it on payroll tax returns, on information returns you file for contractors, when opening a business bank account, and when registering with state tax agencies. It is issued free of charge and, once assigned to an entity, is never reused for another.
Do I need an EIN for my business?
You need one if you have employees, if you operate as a corporation or a partnership, if you file employment, excise, or certain other returns, or if you sponsor a retirement plan. A sole proprietor with no employees can often use their own Social Security number instead, but that changes the moment they hire anyone. Many sole proprietors get one anyway for a practical reason that has nothing to do with tax law: it keeps their Social Security number off every W-9 they hand to a client.
How much does an EIN cost?
Nothing. Applying directly with the IRS is free, and the online application issues the number immediately during the session. Any service charging a fee is charging for form completion rather than for the number itself, and none can obtain it faster than the free route, which is already instantaneous. The application asks for the entity name, address, type, state of formation, reason for applying, and the responsible party’s own taxpayer identification number, all of which a business owner already has.
What is the difference between an EIN, a TIN, and an SSN?
TIN is the umbrella category rather than a number: taxpayer identification number covers every identifier the IRS uses. An EIN identifies a business or other entity. A Social Security number identifies an individual. There is also an individual taxpayer identification number for people who need to file but are not eligible for a Social Security number. This matters because forms ask for a TIN and then expect a specific one: an entity should give its EIN, an individual should give their Social Security number, and a mismatch between the two is a common cause of IRS notices.
How long does it take to get an EIN?
The online application issues the number immediately, within the same session, provided your entity is eligible for that route and the responsible party has a valid taxpayer identification number. Applying by fax typically takes about four business days, and applying by mail can take four to five weeks. The practical implication is planning: if you are hiring your first employee and need the number for payroll registration, apply online rather than by post, and do it before you need it rather than during the week somebody starts.
Can I apply for more than one EIN in a day?
No. Since May 2012 the IRS has limited issuance to one EIN per responsible party per day, and the limit applies across every application method rather than just to the online route. If you are setting up several entities at once, that is several days of applications rather than an afternoon, and it is worth knowing before you promise a bank or a landlord a number by a particular date. The limit is per responsible party, so different responsible parties for genuinely different entities are not caught by it.
Do I need a new EIN if my business changes?
Sometimes. A change of business name or address generally does not require a new number; you report those instead. A change in entity structure often does: a sole proprietorship that incorporates or takes on a partner generally needs a new EIN, as does a partnership that incorporates. A single-member LLC that keeps disregarded tax treatment can often keep its existing number, while adding members or electing corporate treatment can change the answer. Confirm your specific facts with the IRS guidance or a tax professional before assuming either way.
What do I do if I lost my EIN confirmation letter?
Look for the number itself first, because it appears on any payroll tax return you have filed, on information returns you issued, on your business bank paperwork, and on state registrations. If you need an official letter rather than just the number, request a Letter 147C from the IRS business and specialty tax line. The original CP 575 notice is issued once and is not reissued, so the 147C is the accepted substitute rather than a downgrade, and banks and payroll providers treat it as equivalent.