Employer Identification Number (EIN)

An Employer Identification Number (EIN), also called a Federal Tax Identification Number, is a 9-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for federal tax purposes. The EIN format is XX-XXXXXXX.

An Employer Identification Number (EIN), also called a Federal Tax Identification Number, is a 9-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for federal tax purposes. The EIN format is XX-XXXXXXX. The concept is foundational to US business law and tax practice. Most founders encounter employer identification number (ein) either at formation, during major business changes, or in connection with compliance filings.

The EIN system was established under the Internal Revenue Code of 1954, replacing earlier business identification systems. The IRS began assigning EINs en masse with the introduction of computerized tax filing in the 1960s. Online EIN application (immediate issuance for US founders) launched in 2007.

Employer Identification Number (EIN) typically applies in these situations:

• At formation. Many of these concepts are decided when the entity is first created.
• During growth stages. As businesses scale, the concept may become more relevant or change in application.
• Tax planning. Most concepts in this area have direct tax implications.
• Liability and asset protection. Many of these structures exist primarily to manage legal and financial risk.
• Investor and M&A activity. Funded startups and acquisition targets need precise compliance with these concepts.

1. Research applicable rules. Employer Identification Number (EIN) is governed by a combination of federal (IRS, FinCEN) and state law. Verify current rules.
2. Gather required information. Most filings require entity details, identifying information, and supporting documentation.
3. Complete the form or filing. Federal filings typically go to IRS, FinCEN, or USPTO. State filings go to the Secretary of State or applicable state agency.
4. Pay any applicable fees. Federal fees vary; state fees range from free to several hundred dollars depending on filing type.
5. Maintain documentation. Keep filed copies and supporting records for at least 7 years for tax purposes.
6. Track ongoing compliance. Many concepts in this area trigger ongoing filing or reporting requirements.

• Missing deadlines. Federal and state deadlines for filings related to employer identification number (ein) are strict. Missing them often results in penalties.
• Incorrect classification. Many concepts have multiple sub-types that affect treatment. Get the classification right at the start.
• Inadequate documentation. When something goes wrong, documentation determines outcomes. Maintain clear records.
• Ignoring state variations. US business law varies significantly state-to-state. What's true in Delaware may differ in California.
• DIY without verification. Employer Identification Number (EIN) can be DIYed, but mistakes are expensive. Verify with a professional when uncertain.

Costs associated with employer identification number (ein) vary by type, state, and complexity. File.Business handles most employer identification number (ein) services as part of our compliance plans (starting at $99/yr); we pass through state and federal filing fees at cost. Compare specific cost breakdowns across all 51 jurisdictions using our cost-by-state calculators.