You probably never thought about Employer Identification Numbers (EINs) before you started your business. Now, you might see a ton of forms and feel a bit intimidated. The good news is that you can relax. Getting an EIN is a relatively stress-free part of starting your own company.
That said, you still need to make sure that you do it right. In this article, we will walk you through all the steps you need to follow to get an EIN.
Follow our step-by-step guide and you’ll get your EIN in 10 minutes.
Here is exactly what we cover:
- Whether you need an EIN (and why you might want to get one even if you don’t)
- What information you need
- How to apply (step-by-step instructions)
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You can skip straight to our step-by-step EIN instructions if you're already familiar with the basics of EINs and have all the necessary information on hand. Just click the button below!
Step 1: Determine if you need an EIN for your Massachusetts business
Perhaps the best way to think about an EIN is like a social security number for your business.
When you file your tax returns with the Internal Revenue Service every year, for example, you include your SSN so the government can identify you. An EIN is the same kind of number but is issued for companies rather than people.
Who needs an EIN?
Unlike formation documents or registered agents, an EIN is not one of the basic things every business needs. Some companies need them for specific legal purposes. For example, you need an EIN if your company:
- Has employees
- Has more than one owner/member
- Is an S corporation, C corporation, or an LLC being treated like them for tax purposes
- Is a partnership
- Has a 401(k) plan
- Has to file for bankruptcy
If you are the only person running an LLC, you have no employees, and you’re not using specific federal tax laws, you probably don’t need an EIN. In most cases, though, you’ll want to get an EIN.
The most common reason to get an EIN is so that your company can have its own bank account.
Banks use these numbers in the same way they use social security numbers: to track financial activity and ensure that both they and the government can determine what individuals are responsible for any given business account.
Apart from those vital functions, EINs also have other benefits:
- They can help protect your identity. Using your company’s EIN on company financial documents and applications means you don’t have to use your SSN. That means thieves have fewer chances to steal your identity and wreck your personal credit.
- It’s easier to get business loans. Lenders like to see that potential borrowers have a steady stream of income and good banking habits. Getting an EIN and a bank account helps you persuade them that you’re a good bet.
- Your business can build its own credit. Just like your personal credit history is tied to your SSN, your business builds its own business credit history with an EIN. Again, this is something lenders like to see.
- Your company looks more professional and trustworthy. When you are dealing with other companies, an EIN shows that you are serious about your business and that you are prepared. It’s a psychological effect, true, but it’s one you’ll experience every day.
When you weigh the benefits of having an EIN against the small effort it takes to get one, going through the process makes sense for most companies.
When is it okay to NOT get an EIN?
You might not need an EIN if you are forming a very small business with a limited scope.
Let’s say you want to set up a small business to create custom campaign buttons for politicians who run for office from third parties (i.e., not the major American parties of Republican or Democrat). You create the buttons yourself, by hand. On average, you have four orders per month of 20 buttons each.
You decide to form an LLC so you can look more professional and maybe grow your business a bit. You don’t expect to hire anybody to help you, and you are the only member of your LLC.
The amount of money coming in from your activities is $300 per month or less, and you have no overhead because you work in your garage. Given the small financial demands of your business, you decide not to open a business bank account and instead open a separate personal checking account to hold the money you make.
In this case, you wouldn’t need to get an EIN, even though you still could get quite a bit of benefit from doing so.
Step 2: Wait for Your LLC or Corporation to Be Officially Registered
Before you can get the EIN, you need to make sure that your company is fully formed.
Whether you are forming an LLC, a partnership, or a corporation, your state’s law has a number of steps you must go through before your business can be “born” and recognized as a legal entity.
When you apply for an EIN with the IRS, keep in mind that a computer issues the number automatically. The only way it can do that is if your business is properly formed and exists.
You might be able to get the computer to issue an EIN for a company that isn’t properly formed yet, but that number is not going to be valid. You’ll now have to go through the headache of closing the EIN account, which will involve writing a physical letter to the IRS.
Once you’ve closed the account, then you have to apply for a new number. That’s more trouble than anyone needs for what should be a simple process.
If you’re concerned about whether your business will be formed correctly under state law, you don’t have to do it by yourself. Business formation companies know the rules in all 50 states and will guide you through the process from start to finish. Check out our recommendations for the best formation companies to use.
Step 3: Collect Necessary Information and Prepare your EIN Application
Before you apply for the EIN, you will need to have certain information on hand. After you have formed your company and have proof of formation from your state (e.g., an LLC’s certificate of organization), start gathering the information you will need.
What information do I need to make an EIN application?
Below is a checklist of information you should have on hand before you start applying for an EIN:
- The name of the business owner or manager of your business (probably you)
- That owner or manager’s Taxpayer Identification Number
- Social Security Number (SSN)
- Individual Taxpayer Identification Number (ITIN)
- Your company’s name and mailing address
- The names and addresses of other members/owners or managers
- Your company’s line of business and how it works in that business
- What kind of company you run
- Formation documents for your company (with the date the company was formed)
- Certificate of organization (LLC)
- Articles of incorporation (Corporation)
- Your reason for applying for an EIN
- Number of current employees and the number you expect to have within 12 months
- The start and end date of your company’s fiscal/accounting year
- The date you will begin paying your employees
EIN application filing fees
The Internal Revenue Service provides EINs for free. Do not pay a third party just to get one for you; it’s a waste of money.
Some formation services, though, might throw in an EIN as part of a comprehensive service package. That would be fine, as long as it’s not an individually priced upsell.
Do I need an SSN to apply for an EIN?
As noted above, you will need a Tax Identification Number for the process. For the majority of people in the United States, that is your SSN. If you are not from the US, though, you will likely need to get an ITIN.
Getting an ITIN is a bit more involved than getting an EIN, but it is still a fairly routine process. For more information, visit the IRS’s website for more information on how to apply for an ITIN.
Step 4: Get your EIN Online (Instructions)
Once you have gathered everything that you need to apply for a new EIN, it’s time to complete the actual application. The easiest and quickest way to do this is to use the IRS’s online EIN application assistant.
First, head over to the IRS’ Apply for an Employer Identification Number (EIN) Online webpage.
Click the blue “Apply Online Now” button once you are ready to start your application.
The IRS’ EIN application portal is only available Monday through Friday, between 7 a.m. and 10 p.m. Eastern Standard Time.
You must complete the entire application in one go. The IRS EIN application system does not allow you to save progress and continue at a later time.
You have unlimited time to complete your application. However, if you are inactive (stay on the same page) for more than 15 minutes, you will have to start over from the beginning.
We recommend that you read through all steps below before you begin your application.
Your first step is to select the type of business entity for which you are making an EIN application. For the purposes of this section, we will select “Limited Liability Company (LLC)” – the most common type of business entity. You should select the option that matches your business structure.
The following page will list some of the basic characteristics of an LLC. After making sure you have selected the correct entity type and reading the contents of the page, click on the “Continue” button.
Next, you will have to indicate the number of members (i.e., the number of owners) your LLC has and the state where your LLC is located.
After filling in the required information, click on the “Continue” button.
The next page will show you some information about the way the IRS will treat your business for tax purposes. For LLCs, the tax treatment of your business will depend on the number of members you indicated in the previous step.
If you are the only member (owner) of your LLC, your company will be treated as a disregarded entity for tax purposes, similar to the way sole proprietorships are treated. This means that your LLC will not file taxes separately. Instead, profits and losses should be on Schedule C of your personal tax return.
If instead, you indicated that your LLC has two or more members, the IRS will treat your LLC like a partnership for business tax purposes. This means that your LLC will still be considered a disregarded entity, but you will also need to file Form 1065 with the IRS.
After reading through the information on the page, click the “Continue” button.
The next page will ask you to state why you are applying for an EIN. You can select from the following options:
- You have started a new business
- You already have a business and have hired employees
- You are requesting an EIN to satisfy banking requirements or your local law
- You have changed the type of your business entity
- You have purchased an already existing business
Don't worry if several options apply to you – simply choose the one that you think applies best and click the “Continue” button. This completes the first portion of the EIN application.
The following section will deal mainly with information about the person who will be recorded by the IRS as the primary person managing the affairs of the business. The IRS calls this person “Responsible Party.”
To complete the next step, you will need to provide the tax ID number of the responsible party – most likely your own. This means that you must have either a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN).
On the next page, type the first and last name and tax ID number of the responsible party in the appropriate fields. It is important that the information you provide matches the IRS’ records exactly. You won’t be able to proceed with the application otherwise.
You will also have to select if you are a member (owner) of the LLC or if you are only making the application on behalf of the LLC. Once you are finished, click the “Continue” button.
The next section of the application is about your LLC’s physical address. Your LLC’s address must be located in the United States, and you cannot use a PO box.
Note that you can only input up to 35 characters in the street address box. If your address is longer than 35 characters, you should ensure that it includes the most essential information.
The IRS will compare your address with information from the USPS records and let you make any necessary changes.
If you’d like the IRS to send your mail to a different address, be sure to check the corresponding option. In that case, you will be prompted to provide another address. Once you are finished, click the “Continue” button.
The EIN application assistant will compare the address you provided with the IRS’ address records and give you the option to use either the mailing address you provided or the standardized version.
Pick whichever version you prefer by clicking on the corresponding “Accept” button.
In the next few pages, you will need to enter detailed information about your LLC and the type of business it does. You will have to provide the following information on the first page:
- Your LLC’s legal name: This is the name of your LLC as it appears on your formation documents.
- Your LLC’s DBA or trade name: You can leave this field blank if your LLC doesn’t have a DBA and goes by its full legal name instead
- The county where your business is located
- The state or territory where your business is located: For most businesses this will likely be the same as the state where the LLC was formed
- The state or territory where your LLC was formed: This is the state where you filed your articles of organization (in Massachusetts, they are called “certificate of organization”)
- The start date of your LLC: Check your certificate of organization (or similar document) to find out when your LLC officially began its existence as a legal entity
The IRS restricts the characters you can use for your LLC’s legal name to alphanumeric characters, hyphens (“-”) and the ampersand character (“&”).
If your LLC’s legal name includes special characters, the IRS suggests spelling them out or omitting them. For more information, check the IRS’ EIN FAQs page.
After making sure that the information you entered is correct, press the “Continue” button.
You’ll find some more questions about your business on the next page. Answer them by clicking the “Yes” or “No” buttons next to them. You can find more information about Form 720 and Form W-2 on the IRS website.
Depending on how you answer these questions, you may have to fill out some additional information on the next page.
For example, if you answer that you will have employees who will receive W-2 forms, you will have to state the number of employees and the first date on which wages will be paid.
Once you are satisfied with your answers, click the “Continue” button.
You’re almost at the finish line now. On the next page, select the type of business your LLC engages in from the list of options. You can only pick one option, so select the one that best describes your business.
If you feel like your LLC doesn’t fit in any of the categories, you can select “Other” and provide more information on the next screen.
Click the “Continue” button when you are ready to proceed.
The EIN application assistant will now ask you how you would like to receive your EIN. You can either receive it digitally as a PDF file or as a physical letter by mail. We recommend picking the first option so that you can receive your EIN and EIN Confirmation Letter immediately.
Select the “Receive letter online” option and click on the “Continue” button to proceed. Don't worry if you currently do not have Adobe Reader installed. Just make sure to save the EIN confirmation letter file to your device.
You’ve reached the final page of your EIN application. This summary page will list the information you have provided in the previous steps and give you a final chance to verify that everything is correct.
You won’t be able to make any changes or return to this page once you click the “Submit” button, so you should double-check your information now. It may also be a good idea to follow the IRS advice and make a screenshot of this page for your records.
Click the “Submit” button once you are satisfied with everything, and you will be assigned an EIN.
Make sure that you download and print your EIN Confirmation Letter from the next page!
You will likely need your EIN Confirmation Letter in the future, and you won’t be able to return to this page once you close the EIN application assistant, so it is important to save your EIN Confirmation Letter now.
The IRS will not issue you another EIN Confirmation Letter (CP 575 letter) if you fail to download yours or misplace it. You will instead have to request an EIN Verification Letter (147C) and wait until you receive it.
Congratulations, you now have an EIN number for your business!
Federal EIN vs. Massachusetts Tax ID
Keep in mind that an EIN is not the only number that your business needs related to taxes. An EIN is issued by the IRS, a federal government agency. But remember that your company was formed under the laws of your state, which also requires your company to pay taxes.
The taxes you pay using your Massachusetts Tax ID number include:
- State income tax
- Franchise tax
- Sales and use tax (which you will have to collect from customers and pay to the state)
- Employer taxes
The state keeps track of your tax information using a Tax ID number. You get this number from the Massachusetts Department of Revenue after you form your company. You won’t need your state tax ID to get an EIN, but you should get it as soon as possible after forming your company.
How long does it take to get an EIN?
Getting an EIN from the IRS is simple and fast; the process will take less than 15 minutes online.
Apply on the IRS website, and you’ll be done in minutes. If you prefer to go offline or you don't have reliable Internet service, you can also apply with an IRS form SS-4 by mail or fax. A faxed application takes about a week to process. A mailed application can take four weeks.
How much does it cost to get an EIN?
EINs are issued by the IRS for free. You should never have to pay for an EIN.
If you chose to form your business with a formation company or attorney, getting your EIN should be part of the deal. But because EINs are not strictly part of the formation process, many services try to upsell EINs for $30 to $70. We recommend against paying for EIN upsells.
EIN Quick Links
- Information about Being Your Company’s “Responsible Party” When You Apply for an EIN
- IRS — Apply for an EIN Online
- IRS — Form SS-4 to Apply for EIN by Mail or Fax
- IRS — How to Apply for an EIN
- IRS — How to Apply for an ITIN
- IRS — How to Cancel an EIN
- IRS — Taxpayer Identification Numbers
Employer Identification Number FAQs
Do I need an EIN for my business?
In most cases, yes. But even if you don’t need one as a legal matter, it usually makes sense to get one. For example, you won’t be able to open a bank account if you don’t have an EIN.
Where can I get an EIN in Massachusetts?
All EINs are issued by the federal government through the IRS, regardless of your state. You can apply for a federal employer identification number on the IRS website. Keep in mind that you will also have to get a state tax ID number from the Massachusetts Department of Revenue.
How much does it cost to get an EIN in Massachusetts?
EINs are provided by the IRS free of charge.
How long does it take to receive an EIN in Massachusetts?
If you apply online, you can get your company’s EIN in about five minutes. If you apply by mail, you will be waiting around four weeks. A fax application can be processed in about a week.