What Is a Tax ID Number and Why You Need One

A Tax ID Number, also called an Employer Identification Number (EIN) or Federal Tax Identification Number, is a nine-digit code the Internal Revenue Service (IRS) assigns to businesses, nonprofits, trusts, and certain individuals. The format is XX-XXXXXXX, with two digits, a hyphen, and seven more digits.

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The IRS uses this number to track tax records, payroll, and business filings. If you operate a business, hire employees, or run a nonprofit organization, you likely need a Tax ID Number. Self-employed individuals who work as sole proprietors may use their Social Security Number instead, but many choose to obtain a separate Tax ID Number for business purposes.

Tax ID Numbers serve several critical functions. Banks use them to open business accounts. The IRS uses them to organize tax returns and payments. State and local governments use them for business licensing and tax reporting. Employers use them to report employee wages and withholdings to the government. Without a Tax ID Number, your business cannot legally hire employees, open a business bank account in most cases, or file certain tax forms.

Different types of organizations need Tax ID Numbers for different reasons. Corporations need them to file annual returns and pay corporate taxes. Partnerships need them to file partnership returns. Nonprofits need them to file Form 990 returns and maintain their tax-exempt status. Trusts and estates need them for tax filing purposes. Limited Liability Companies (LLCs) typically need them when they have employees or operate as corporations or partnerships for tax purposes.

The IRS issues Tax ID Numbers at no cost. You will not pay any fee to obtain one. However, the process varies depending on your business structure and citizenship status. Understanding where to find your Tax ID Number depends first on whether you already have one or need to obtain one.

Practical Takeaway: Determine whether your business structure requires a Tax ID Number by considering whether you have employees, operate as a partnership or corporation, or need to file specific tax forms with the IRS.

Locating Your Tax ID Number If You Already Have One

If your business has been operating for more than a few months, you likely already have a Tax ID Number issued by the IRS. Finding it requires checking documents your business has received or generated since starting operations. The most reliable places to look are government correspondence, bank records, and business documents you've already filed.

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Your IRS Letter of Determination or Assignment of EIN is the primary document that contains your Tax ID Number. When the IRS assigned your Tax ID Number, they mailed you a letter that included your nine-digit number. This letter typically arrives within two weeks of your Tax ID Number assignment. If you received this letter, it will clearly display your Tax ID Number on the first page. Check your business files, filing cabinets, or email records from the time you started your business. The letter may be labeled as "Notice of Assignment of Employer Identification Number" or similar language.

Your business bank account paperwork also contains your Tax ID Number. When you opened a business bank account, you provided your Tax ID Number to the bank. Your bank statements, checking account agreements, and deposit slips often display your Tax ID Number. Contact your bank's customer service line if you cannot locate this information in your existing documents. Bank representatives can provide your Tax ID Number over the phone after verifying your identity.

Past tax returns filed by your business will show your Tax ID Number. If you filed a federal income tax return, employment tax return, or any other IRS form, your Tax ID Number appears on that document. Review copies of returns you filed in previous years, such as Form 1120 for corporations, Form 1065 for partnerships, Form 1040-SE for self-employed individuals, or Form 990 for nonprofits. Your accountant or tax professional may have copies of these returns if you cannot locate them yourself.

State business filings and licenses also display your Tax ID Number. Many states require businesses to include their Tax ID Number on business license applications, annual reports, and other regulatory filings. Contact your state's Secretary of State office, Department of Revenue, or equivalent agency to request your business information. They can provide your Tax ID Number after confirming your business name and ownership details.

Practical Takeaway: Start your search by gathering all correspondence from the IRS, reviewing bank account documents, checking past tax returns, and contacting your state business licensing agency—these sources will most quickly reveal your existing Tax ID Number.

Obtaining a New Tax ID Number Through the IRS

If your business does not yet have a Tax ID Number and you determine that you need one, the IRS provides multiple methods to request a new assignment. The process varies in length and complexity depending on which method you use. All methods are free.

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The online method through the IRS website is the fastest way to obtain a Tax ID Number. Visit the IRS website at irs.gov and navigate to the section for businesses requesting an EIN. The online application, called the IRS Online EIN Application, takes approximately 15 minutes to complete. You answer questions about your business structure, business location, business purpose, and ownership information. The system immediately assigns your Tax ID Number and displays it on your screen at the end of the application. You also receive an email confirmation with your new Tax ID Number and a copy of your assignment notice. This method works for businesses operated by U.S. citizens and resident aliens. You can print your assignment notice immediately for your records.

The telephone method allows you to speak with an IRS representative who will assign your Tax ID Number during the call. Call the IRS Business and Specialty Tax Line at 1-800-829-4933. Have your business information ready before calling, including your business structure, business location, Social Security Number or Individual Taxpayer Identification Number, and a description of your business activities. The IRS representative will ask you questions and assign your Tax ID Number during the call. They will provide your number verbally and mail you a written assignment notice within weeks. This method takes approximately 15 minutes on the telephone.

The mail method involves completing Form SS-4 and sending it to the IRS address specified on the form. Form SS-4 is the Application for an Employer Identification Number. You can obtain this form from the IRS website, by calling the IRS at 1-800-829-3676, or at your local IRS office. Complete the form with information about your business, including your business name, business location, business structure, and the reason you need a Tax ID Number. Mail the form to the appropriate IRS office based on your location—the form includes mailing addresses by state. The IRS typically processes mailed applications within 4 weeks and mails you an assignment notice.

International applicants who are not U.S. citizens or residents may need to use Form SS-4 submitted by mail or work through a qualified representative. The IRS maintains specific procedures for international applicants. If you fall into this category, contact the IRS International Section or work with a tax professional familiar with international business requirements.

Practical Takeaway: Choose the online application method if you need your Tax ID Number quickly and operate a business in the U.S.; use the telephone method if you prefer to speak with an IRS representative; use the mail method if you cannot access the online system or telephone line.

Understanding Your Tax ID Number Documentation and Records

Once you receive your Tax ID Number, understanding the documentation that proves your assignment helps you provide the correct information to banks, government agencies, and other organizations. Your official IRS documentation comes in several forms, each serving different purposes.

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The IRS Assignment Notice is the official document that proves the IRS assigned your Tax ID Number to your business. This notice displays your Tax ID Number clearly and includes the date of assignment, your business name, business address, and a description of your business activities as reported on your application. The IRS mails this notice to your business address within weeks of assignment. If you obtained your Tax ID Number online, you received a confirmation notice immediately at the end of the application process. Save both your immediate confirmation and the official mailed notice in your permanent business records. You may need to present this notice to banks, state agencies, or other organizations that require proof of your Tax ID Number assignment.

Your IRS Account Transcript provides additional information about your Tax ID Number and tax account. This document shows your Tax ID Number, business name, business address, filing requirements, and a history of correspondence between the IRS and your business. You can request a transcript from the IRS website, by telephone, by mail,