What is EIN (Employer Identification Number)?
The Employer Identification Number is a 9-digit federal tax ID issued by the IRS to identify a business entity. Required for any entity with employees, all C-corps, S-corps, multi-member LLCs and partnerships. Single-member LLCs without employees can use the owner's SSN but commonly get an EIN for banking and 1099 reporting.
Current Rate (Continuously valid)
N/A — free from IRS
Example
A new Delaware C-corp applies for an EIN online at IRS.gov, receives it instantly (XX-XXXXXXX format), and uses it on all federal tax returns and W-2/1099 reporting.
Related terms
A C-corporation is a US business entity taxed separately from its owners under Subchapter C of the Internal Revenue Code. It pays 21% federal corporate income tax on profits, and shareholders pay personal tax on dividends — the 'double taxation' of C-corp profits. Most VC-backed startups are Delaware C-corps.
An S-corporation is a US entity that elects pass-through taxation under Subchapter S. The corporation itself pays no federal income tax; profits flow to shareholders' personal returns. Limited to 100 shareholders, all US individuals (or certain trusts), and one class of stock. Owner-employees must pay 'reasonable compensation' as W-2 wages subject to FICA.
An LLC is a US business entity that combines limited liability with flexible tax treatment. Single-member LLCs default to disregarded entity status (taxed as sole proprietor on Schedule C). Multi-member LLCs default to partnership taxation (Form 1065). LLCs can elect S-corp or C-corp tax treatment via Form 8832/2553.
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