What Is an EIN and How to Get One (Free)

If you’re starting a business in the United States, one of the first questions you’ll run into is: what is an EIN, and do you actually need one? Short for Employer Identification Number, an EIN is the federal tax ID the IRS uses to identify your business, much like a Social Security Number identifies an individual. Whether you’re a US founder forming an LLC, a freelancer hiring your first employee, or an international entrepreneur setting up a US company, understanding the EIN is essential to staying compliant and getting your business off the ground.

An EIN (Employer Identification Number) is a free, nine-digit federal tax ID number the IRS assigns to a business to identify it for tax filing, payroll, banking, and reporting purposes. Most businesses can apply online directly with the IRS at no cost.

What is an EIN?

An EIN is a unique nine-digit number formatted as XX-XXXXXXX, issued by the Internal Revenue Service. It functions as your business’s federal tax identification number. When you ask what is an EIN in practical terms, think of it as a Social Security Number for your company: it tells the IRS, banks, and other agencies exactly which business entity they’re dealing with. The number never expires and is never reissued to another business, even if you close yours. EINs are also sometimes called Federal Tax Identification Numbers or FEINs (Federal EINs).

Who needs an EIN (and who doesn’t)

According to the IRS, you must obtain an EIN if your business does any of the following: has employees; operates as a corporation or partnership; files employment, excise, or alcohol/tobacco/firearms tax returns; withholds taxes on income (other than wages) paid to a non-resident alien; or has a Keogh plan. Multi-member LLCs and most corporations need one by default.

Who doesn’t strictly need one? A sole proprietor or single-member LLC with no employees and no excise tax obligations can often use the owner’s Social Security Number instead. However, many such owners still get an EIN voluntarily to open a business bank account, build business credit, and avoid sharing their SSN with clients on tax forms. If you’re unsure which category you fall into, your business structure is the deciding factor, and it’s worth confirming before you apply.

What an EIN is used for

An EIN does a lot of heavy lifting once your business is running. Common uses include:

Filing federal and state business tax returns
Setting up payroll and reporting employment taxes
Opening a business bank account (nearly every US bank requires one)
Applying for business licenses and permits
Establishing business credit separate from your personal credit
Issuing and receiving Form 1099s with contractors and vendors
Forming retirement and benefit plans for your team

In short, the EIN is the thread that ties your business’s financial and tax identity together across the IRS, lenders, and partners.

How to apply for an EIN free online with the IRS

The fastest and cheapest way to get an EIN is to apply directly through the IRS yourself. The IRS does not charge any fee for issuing an EIN. The online application is available to businesses whose principal location is in the US or US territories and whose responsible party has a valid taxpayer ID (SSN, ITIN, or existing EIN). When you complete the online application, you receive your EIN immediately upon validation. You can review the official guidance on applying for an EIN online directly on IRS.gov.

Step-by-step: applying for your EIN

Confirm you’re eligible. Make sure your business is legally formed (if required) and that you have a valid responsible party with a taxpayer ID.
Go to the official IRS website. Navigate to IRS.gov and find the EIN online application. Never use a third-party site that charges a fee.
Choose your entity type. Select the structure that matches your business: sole proprietor, LLC, corporation, partnership, estate, trust, and so on.
Enter the responsible party details. Provide the name and taxpayer ID of the individual who controls the entity.
Provide business information. Include your legal name, mailing address, start date, and the reason you’re applying.
Submit and receive your EIN. Once the IRS validates your information, your EIN is issued instantly. Download and save the confirmation notice (CP 575).

The online tool is available during posted IRS hours, and you must complete the session in one sitting, as it times out after a period of inactivity. International applicants who can’t use the online system can apply by fax or mail using Form SS-4, or by phone.

EIN vs SSN vs ITIN: what’s the difference?

These three numbers are easy to confuse, but they serve different purposes:

SSN (Social Security Number): Issued to US citizens and authorized residents to track individual earnings and benefits. Used for personal taxes and identity.
ITIN (Individual Taxpayer Identification Number): Issued by the IRS to individuals who must file US taxes but aren’t eligible for an SSN, including many non-resident aliens and foreign nationals.
EIN (Employer Identification Number): Issued to a business entity, not an individual, to identify it for federal tax purposes.

An individual might hold an SSN or ITIN, while their business holds a separate EIN. The responsible party often uses their SSN or ITIN to obtain the company’s EIN.

Getting an EIN as a non-US founder

You do not need to be a US citizen or resident to get an EIN for a US business. Foreign founders who form a US LLC or corporation are eligible, but the online application typically requires the responsible party to have an SSN or ITIN. If you don’t have either, you can still obtain an EIN by submitting Form SS-4 by fax or mail, or by calling the IRS international line. Many non-resident founders work with a tax professional to navigate this process correctly, since errors on entity classification or treaty positions can be costly. If you’re expanding into the US from abroad, our guidance on international & expat tax covers the wider compliance picture you’ll need to plan for.

What is the “responsible party”?

Every EIN application must name a responsible party: the individual who ultimately owns or controls the entity and exercises effective control over its funds and assets. The IRS requires this to be a natural person (not another entity, except for certain government entities), and they generally limit one responsible party to obtaining one EIN per day through the online tool. If your business’s ownership or control changes, the IRS expects you to update the responsible party by filing Form 8822-B within 60 days of the change.

What to do if you lose your EIN

Misplaced your EIN? Don’t apply for a new one. You can recover it by checking the original CP 575 confirmation notice the IRS mailed when you applied, looking at a previously filed tax return, reviewing old business bank account or loan paperwork, or calling the IRS Business & Specialty Tax Line, where an assistor can provide it after verifying your identity. Once you find it, store it somewhere secure alongside your other key business records.

Mistakes to avoid (especially paid EIN scam sites)

The single most common mistake is paying for something that’s free. Many third-party websites advertise “EIN registration” or “EIN filing services” and charge fees ranging from $50 to several hundred dollars to do something you can complete yourself in minutes for free on IRS.gov. Some of these sites are misleading, and a few are outright scams that harvest your sensitive business data. Other frequent errors include:

Applying before your entity is legally formed with the state
Choosing the wrong entity type, which can affect how you’re taxed
Listing an entity instead of a natural person as the responsible party
Applying for multiple EINs when you only need one
Forgetting to update the IRS when ownership or your address changes

When in doubt, use only official IRS channels, and consider professional help if your situation is complex. You can verify the IRS’s free guidance on Employer Identification Numbers directly on IRS.gov.

Frequently asked questions

What is an EIN used for if I don’t have employees?

Even without employees, an EIN lets you open a business bank account, build business credit, file certain entity tax returns, and avoid putting your personal Social Security Number on contractor and vendor forms. Many single-member LLCs and sole proprietors get one for these reasons alone.

How much does it cost to get an EIN?

Nothing. The IRS issues EINs free of charge. Any website or service charging a fee to “get” your EIN is selling you something you can do yourself for free directly on IRS.gov.

How long does it take to get an EIN?

If you apply online through the IRS during posted hours, you receive your EIN immediately after your application is validated. Fax applications generally take about four business days, while mailed applications can take several weeks.

Can I get an EIN without a Social Security Number?

Yes. If you don’t have an SSN or ITIN, you can’t use the online tool, but you can still apply by submitting Form SS-4 via fax or mail, or by calling the IRS international line. This is a common route for non-US founders.

Do I need a new EIN if my business changes?

It depends. Changing your business name or address usually doesn’t require a new EIN, but changing your entity structure (for example, from a sole proprietorship to a corporation) often does. The IRS publishes specific rules on when a new EIN is required.

Ready to set up your business the right way?

Getting your EIN is just the first step in building a compliant, tax-efficient business. Whether you’re a US founder choosing an entity, a freelancer formalizing your operations, or an international entrepreneur expanding into the US, Tranzesta can guide you through every decision. Book a free consultation with our team today and start your business on solid footing.

Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules and IRS procedures change over time; always verify current requirements on IRS.gov and consult a qualified professional about your specific situation.