Obtaining Employer Identification Number in USA
An Employer Identification Number or EIN in the USA is also referred to as a Federal Tax ID Number. When someone does business in the USA, he/she can use this Employer Identification Number to identify the company and file taxes with the authorities.
In the USA, every business is required to have an Employer Identification Number. The federal government issues this unique Employer identification number. The IRS uses the Employer Identification Number in the USA in order to easily and quickly identify each business for tax purposes.
If someone needs to get an Employer Identification Number from outside the USA, the process is pretty straightforward and can be easily obtained. In the article, we will discuss the complete procedure of obtaining an Employer Identification Number in the USA.
What is an Employer Identification Number in the USA?
Employer Identification Number in the USA is a unique 9-digit number allotted by the Internal Revenue Service or IRS to each business operating in the USA. Like the social security numbers, these Employer Identification Numbers are unique for each entity. These numbers are used by the Internal Revenue Service or IRS to identify entities.
Thus, every business in the USA is required to provide this Employer Identification Number in all the tax-related transactions, forms, and documentation. Employer Identification Number cannot be utilized for any purpose other than tax administration. Employer Identification Number or EIN is also referred to as Federal Tax Identification Number or Federal Employer Identification Number.
When to apply for Employer Identification Number in the USA?
In order to provide some clarity regarding the requirement of Employer Identification Number in the USA and who is required to apply for the same the list of scenarios while obtaining Employer Identification Number in USA mandatorily required are as follows:
- When a new business is established;
- There is the hiring of employees in the new business including household employees in case of sole proprietorships;
- Opening a business bank account for the new organization;
- Certain changes in ownership or organizational structure of the new business;
- Formation of a Corporation, LLP, Partnership, Trust etc;
- The business withholds taxes on the income that is paid to one or more non-resident aliens;
- The business has a Keogh plan, which is a retirement plan for those who are self-employed;
- The partners and members can file any of the following tax returns, such as the Excise, Employment, and Alcohol, Tobacco and Firearms tax returns;
- The business is involved in any of these kinds of corporate structures in the USA such as the estates, trusts, non-profit organizations, real estate mortgage investment conduits, plan administrators, and farmers' cooperatives;
- The business is of importing goods to the USA, such as for sale on marketplaces like Amazon. Customs require an Employer Identification Number when goods are valued over a certain amount or ship them to the USA by sea.
Eligibility Criteria for Obtaining Employer Identification Number in the USA?
The main eligibility criteria prescribed by Internal Revenue Services or IRS in the USA in order to be eligible to apply for Employer Identification Number:
- The business must be located in within United States Territory; and
- The applicant of EIN must have a valid Taxpayer Identification Number (TIN).
What is the procedure to Obtain an Employer Identification Number in USA?
To obtain an Employer Identification Number in the USA, a person can make an application by various modes:
The time frame of granting the Employer Identification Number in the USA will depend upon the mode of application made by the applicant. The most frequently used mode is the online application mode.
The online Employer Identification Number application is the most preferred method for customers to apply for and obtain an Employer Identification Number in the USA. Once the applicant completes the application, the information is validated during the online session, and an Employer Identification Number is issued immediately. The online application procedure is available for all those entities whose principal business, agency, or office, or a legal residence in the case of an individual, is located in US Territories.
The online application consists of the following steps:
- File the online application with all the necessary information;
- The information provided by the applicant will be validated on the online session;
- Employer Identification Number will be issued immediately after verification.
Once the Employer Identification Number is issued, the Employer Identification Number letter will be sent to the provided address of the business within four weeks.
Apply by Fax
The taxpayer can fax the completed Form SS-4 (in PDF) application to the appropriate fax number. The application can only be faxed after ensuring that the Form SS-4 contains all of the required information by the authorities. If it is determined that the business needs a new Employer Identification Number, the applicant will be assigned using the proper procedures for the type of entity.
If the fax number of the taxpayer is provided, a fax will be sent back with the Employer Identification Number within 4 business days.
Apply by Mail
The processing timeframe for an Employer Identification Number application received by mail is 4 weeks. Ensure that the Form SS-4 (in PDF) contains all of the required information for filing an application for Employer Identification Number in the USA. If it is determined that the business needs a new Employer Identification Number, the applicant will be assigned using the suitable procedures for the kind of entity and mailed to the taxpayer.
Apply by Telephone – International Applicants
The International applicants can call on 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday to Friday to obtain their Employer Identification Number in the USA. The person making the call should be authorized to receive the Employer Identification Number. The person should also be able to answer questions concerning the Form SS-4 (in PDF) and application for Employer Identification Number.
Complete the third-party Designee section only if the applicant wants to authorize the named individual to receive the Employer Identification Number of the entityand also answer the questions about the completion of Form SS-4. The designee’s authority dismisses at the time the Employer Identification Number is assigned and released to the designee. The applicant should complete the signature area for the authorization to be valid in the USA.
Essential points that are to be considered for an Online Application of Employer Identification Number in USA?
The essential points to be considered for an online application of Employer Identification Number in USA:
- Online application option is available to only such businesses that have their principal business, office, or agency in the USA or USA territories.
- An online application is an option that is available in the case of individuals if their legal residence in the USA or USA territories.
- The entire application for Employer Identification Number is required to be submitted in one session as there is no other option available to save and continue later.
- In case someone is inactive for more than 15 minutes, the session will expire, and the person will be required to restart once again.
What is the essential information required for an application of Employer Identification Number in USA?
The essential information required by the applicant to be submitted for an application of Employer Identification Number in USA is as follows:
- Legal Name of the Entity of Applicant;
- Trade Name of the Business of Applicant;
- Name of the Executor;
- Address of the Business of Applicant;
- Name of the Responsible Party;
- Social Security Number or Taxpayer Identification Number or Employer Identification Number of the Responsible Party;
- Type of Business of Applicant;
- Information of Members and Partners of business of the applicant;
- Date of Formation of the Company;
- Reason of Application;
- Information relating to the goods or services offered by the business etc.
What is the procedure of Cancelling the Employer Identification Number in USA?
Once the business of the applicant has received an Employer Identification Number, the Internal Revenue Service or IRS won’t be able to cancel it. The Employer Identification Number becomes the federal taxpayer ID number of the company indefinitely, even if it never uses it to file the tax returns.
The unique Employer Identification Number in USA will never be reassigned or reused by being issued to any other business entity. So, if any person doesn’t end up using the Employer Identification Number in the near future, it will always be there if the business picks up later on.
However, according to the Internal Revenue Service or IRS in the USA, if someone does get an Employer Identification Number, but doesn’t require the same then it can be closed.
The person is required to send to the IRS a letter that contains the legal name of the business, along with the address of the business, the Employer Identification Number, and the reason the person wants to close the bank account. Before the bank account can be closed, the person is required to pay all of the taxes that the person owed.
How Can We Help
Our team at Enterslice is a one-stop solution if you are planning to set up a business in the USA. We ensure smooth implementation of your work and assistance in international registration and also include the procurement of Employer Identification Number or Federal Tax Id for your business.
We follow these simple steps for effective execution of your order with us:
- STEP 1: Once you post your inquiry, we understand your requirement through one on one discussion with our executives and suggest you the most appropriate service package offered by us. We will look for the best possible solutions for your questions and assist you in the best possible ways. Based on the discussion, we will generate your orders.
- STEP 2: Once the order is created, you will be required to make the payment along will all the necessary documentation. The payment amount will include our services fees as well as the relevant government fees. And a list of all the required documents will be provided to you by our executives. You can make the payment through any of the following modes:
1) Bank Transfer- NEFT/IMPS
2) M Swipe (Credit/Debit Card)
3) Paytm or Razor pay
- STEP 3: Once the payment is made, all the documents will be reviewed by our service executives, and work will be initiated from our end. You will be kept in the loop in every step of the work and updated on every action. Once the order is completed an Employer Identification Number application is filed, we will provide you all the necessary documents.