What is an EIN, why is it needed and how to get it in the USA?

EIN, or Employer Identification Number, is a unique nine-digit identification number assigned to companies and organizations in the United States for tax purposes. It is issued by the Internal Revenue Service (IRS) and is valid indefinitely. This number is required so that the government can track the tax liability of the organization and control their compliance with the law, in other words, it can be called the “US tax number of the company».

Where can be use EIN?

An EIN is required for many aspects of doing business in the US. If you are creating a company or organization in the United States, then the EIN number is indispensable, as it is used to identify the company in government agencies and other US institutions.

Thus, an EIN will be needed when performing the following steps:

• Opening a bank account. Most banks require an EIN to open a business account.
• Registration of tax return. When filing a tax return at the federal and state levels, you must use an EIN.
• Submission of tax reports. An EIN is also required to file tax returns, such as Form 1099, which notifies the IRS of amounts paid.
• Obtaining a license. Some businesses require a license, and the EIN can be used when registering for this license.
• Registration of contracts. When you enter into contracts with your counterparties, they may require you to provide an EIN.
• Acceptance of payments. If you accept payments from customers or counterparties, EIN can be used when registering with payment systems.
• Hiring employees. EIN is used to identify a company as an employer when filing and paying taxes, and when providing information about salaries and other income to employees.

How to get an EIN number?

Every US legal entity can easily obtain a tax number. There are several ways to get an EIN in the USA:

1. Online through the US tax website – IRS. To do this, you need to fill out an application on the site. The application consists of filling out a survey form, where you need to specify information about the company, address, type of organization, number of employees and other information. After filling out the application, the assigned EIN will be sent immediately by e-mail, if all the data has been entered correctly.
2. Sending an application via mail. You can download the form from the IRS website, fill it out, and mail it in (on paper). This method may take some time as the application may take several days or even weeks to process.
3. You can get an EIN immediately after registering a new company in the USA.

The EIN application form is called Form SS-4 (Application for Employer Identification Number). Form SS-4 includes questions about company type, name and address, information about owners and managers, organizational structure, and other details. When filling out the form, it is important to be careful and provide accurate and truthful information, as incorrect data can lead to a delay in the processing of the application or even to the denial of a number assignment.

If you have any questions during the process of filling out the form or difficulties with filling it out, you can contact our specialists for help and we will help you get an EIN.

Importantly, the EIN does not expire and does not need to be renewed. However, legal entities must update their information when their address, company name, or other significant changes change. To do this, Form 8822-B is filed with the IRS within 60 days of the date of the change.

In general, obtaining an EIN is one of the first steps in setting up a company in the United States, and it is necessary for the proper conduct of business in accordance with the law and tax rules, and its presence helps to avoid fines and other problems in USA.