IRS Form SS-4: How to Apply for an EIN

Every business, nonprofit, trust, and estate needs an Employer Identification Number — essentially a Social Security number for your organization. Form SS-4 gets you one for free, and you can receive it instantly online. Yet third-party websites charge $50 to $300 for a service the IRS provides at no cost, a scam that catches thousands of new business owners every year.

History and Origin

The Employer Identification Number system dates back to 1974, when the IRS adopted a standardized nine-digit numbering system for identifying business entities for tax purposes. Before the EIN, businesses were tracked through a less organized system that relied heavily on the owner's Social Security number.

The original purpose of the EIN was exactly what its name suggests; to identify employers for payroll tax reporting. But over time, the EIN became the universal identifier for any entity that interacts with the tax system: corporations, partnerships, sole proprietorships with employees, nonprofits, trusts, estates, government agencies, and certain individuals with non-employee tax obligations.

Form SS-4 was the paper application for obtaining an EIN. For decades, the process required mailing or faxing the form to the IRS, with processing times of four to six weeks by mail or about a week by fax. In 2004, the IRS launched the online EIN application, which revolutionized the process. The online application is available during business hours and issues an EIN immediately upon completion; a process that takes about 10 minutes.

Despite the existence of the free online application, the IRS has struggled to combat third-party websites that mimic the IRS site and charge substantial fees for what is essentially a form-filling service. These sites often appear at the top of search results and use domain names designed to look official. The IRS has repeatedly warned taxpayers to apply only through IRS.gov.

Who Files It and When

You need an EIN if you:

• Start a new business (corporation, partnership, LLC, or sole proprietorship with employees)
• Hire employees
• Open a business bank account (most banks require an EIN)
• Form a corporation, partnership, or multi-member LLC
• Create a trust or estate
• Establish a nonprofit organization
• Are a sole proprietor and want to keep your SSN off business documents (using an EIN on W-9 forms instead)
• Have Keogh plan or other qualified retirement plan obligations
• Are involved with certain types of organizations (farmers' cooperatives, plan administrators)

There is no specific deadline for obtaining an EIN; you apply when you need one. However, you must have an EIN before filing any tax return or making any tax payment that requires one. Practically, most businesses obtain their EIN as one of their first steps after formation.

You can apply for an EIN through three methods:

• Online: Available Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. EIN issued immediately. The responsible party must have a valid SSN or ITIN.
• Fax: Fax the completed Form SS-4 to the IRS. Processing takes about four business days.
• Mail: Mail the completed Form SS-4 to the IRS. Processing takes four to six weeks.

International applicants without an SSN or ITIN cannot use the online application and must apply by phone, fax, or mail.

Key Sections Explained

Lines 1-6; Entity Information

These lines capture the legal name of the entity, trade name (DBA) if different, the mailing address, and the county and state where the business is located. If the entity is an LLC, the legal name should match the name on your articles of organization filed with the state.

Line 7a; Responsible Party

Every EIN application must identify a responsible party; an individual (not an entity) who owns or controls the entity and who directs the management of its funds and assets. For a sole proprietorship, this is the owner. For a corporation, it is typically a principal officer. The responsible party's SSN or ITIN is required and is used by the IRS to link the entity to an individual for accountability purposes.

Line 9 — Type of Entity

You select the type of entity applying for the EIN: sole proprietor, partnership, corporation, personal service corporation, church, nonprofit, trust, estate, plan administrator, or other. This selection determines how the IRS classifies the entity and what types of returns it will be expected to file.

Lines 10-18 — Business Details

These lines ask about the reason for applying (started new business, hired employees, created a trust, etc.), the date the business started or was acquired, the principal activity, and whether the entity expects to have employees. The estimated number of employees and expected employment tax liability are also requested — these help the IRS prepare for the returns it will expect to receive.

Common Mistakes

• Paying a third-party site. The most expensive mistake is paying someone $50-$300 for something the IRS provides for free. Always apply directly at IRS.gov.
• Applying for multiple EINs unnecessarily. Each distinct legal entity needs one EIN. A sole proprietor who incorporates gets a new EIN for the corporation but does not need additional EINs for each product line or location.
• Using the wrong entity type. Selecting "sole proprietor" when you have formed an LLC, or "corporation" when you have a partnership, creates mismatches in the IRS system that can cause problems when filing returns.
• Not updating the responsible party. If the person listed as the responsible party changes (due to a change in ownership or management), you must notify the IRS using Form 8822-B. Failure to update this information can delay processing of returns and correspondence.
• Applying online outside business hours. The online application is only available during specific hours. Attempting to apply outside these hours results in an error, leading some applicants to believe they need to use a paid service.

Recent Changes

The IRS has made several improvements to the online EIN application process. The system now validates information in real time, reducing errors that previously required manual IRS correction. The online application also now provides a confirmation notice (CP 575) that can be printed immediately, rather than waiting for a mailed copy.

In 2019, the IRS implemented a one-EIN-per-day limit per responsible party for online applications. This was designed to combat fraud — specifically, criminals using stolen SSNs to obtain multiple EINs for identity theft purposes. Legitimate applicants who need more than one EIN in a day must use the fax or mail method for additional applications.

The IRS has also enhanced its warnings about fraudulent third-party EIN services. The official IRS page prominently warns that the EIN application is a free service and that taxpayers should be cautious of any website that charges a fee for obtaining an EIN.

This article is educational and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.