Whether you’re launching your first LLC or managing multiple businesses across state lines, understanding when and why you need an Employer Identification Number (EIN) can save you time, money, and compliance headaches. This guide breaks down everything digital nomads, remote founders, and entrepreneurs need to know about EINs in 2025.
What Is an EIN?
An Employer Identification Number (EIN) is your business’s unique nine-digit identifier issued by the Internal Revenue Service. Think of it as a Social Security Number for your company. Also known as a Federal Tax ID or Tax Identification Number (TIN), your EIN is essential for tax reporting, banking, and business operations.
Banks require it to open accounts, payment processors need it to verify your business, and many vendors request it before establishing relationships. For location-independent entrepreneurs and digital nomads, an EIN provides professionalism and legitimacy when dealing with US-based clients and partners.
When Your LLC Legally Requires an EIN
According to the IRS, specific circumstances make obtaining an EIN mandatory:
Your LLC Has Employees
If you hire anyone (full-time, part-time, or W-2 contractors), an EIN is required for reporting payroll taxes and filing employment tax returns. Even hiring a single employee triggers this requirement. You’ll use your EIN to report wages on Form 941 and issue W-2 forms at year-end.
Your LLC Files Excise Taxes
Excise taxes apply to businesses dealing with tobacco, fuel, alcohol, indoor tanning services, heavy trucks, or certain environmental products. These taxes are paid by businesses on specific goods and services using Form 720. Unlike sales taxes, excise taxes are calculated into the product price rather than added at checkout.
Your LLC Offers Retirement Plans
Offering a 401(k), SEP-IRA, or other qualified retirement plan requires an EIN, even for single-member LLCs where you’re the only participant. Retirement plans involve significant IRS reporting requirements, and your EIN links the plan to your business entity.
Your LLC Withholds Taxes for Nonresident Aliens
If your business pays income to nonresident aliens, you must withhold taxes on that income and need an EIN for IRS reporting and compliance with international tax treaties.
You Don’t Have a Social Security Number
Nonresident aliens who cannot obtain a US Social Security Number must get an EIN to operate a US LLC legally. Learn more about starting a US LLC as a non-resident.
You Want to Open a Business Bank Account
While not an IRS requirement, virtually every US bank requires an EIN to open a business checking account. This practical necessity makes an EIN essential for separating business and personal finances, which protects your limited liability status and simplifies tax preparation.
Single-Member LLCs: Do You Really Need an EIN?
Single-member LLCs are treated as “disregarded entities” by the IRS, meaning income flows to your personal tax return. Technically, if you have no employees, don’t file excise taxes, and don’t offer retirement plans, you can use your Social Security Number instead of an EIN.
However, we strongly recommend getting an EIN for these compelling reasons:
Privacy Protection: Using your SSN for business transactions exposes you to identity theft risks. Every invoice, vendor contract, and client payment would contain your personal identification number. One compromised document could lead to serious financial consequences.
Professionalism: Providing an EIN demonstrates established business operations, especially important when working with US corporate clients who have strict vendor requirements. Some clients hesitate to work with sole proprietors using SSNs because it signals less formal business structures.
Future-Proofing: Even if you start solo, growth plans like hiring employees, adding partners, or expanding across states become simpler when you already have an EIN. Converting from SSN to EIN later requires updating all banking, payment processing, vendor relationships, and client records.
Requirements for International Entrepreneurs
International entrepreneurs face unique considerations when starting a US LLC.
ITIN vs. EIN: Understanding the Critical Difference
An Individual Taxpayer Identification Number (ITIN) serves as your personal tax identifier if you generate US-sourced income but cannot obtain a Social Security Number. The IRS issues ITINs to anyone with US tax filing obligations, regardless of immigration status.
However, an ITIN only addresses your personal tax obligations and cannot replace an EIN for your LLC. Your LLC needs its own EIN for:
- Opening US business bank accounts
- Processing payments through US payment processors
- Hiring employees or contractors
- Filing business tax returns
- Establishing business credit
You may need both an ITIN (for personal taxes) and an EIN (for your LLC). According to the IRS, ITIN processing times typically run 7 weeks during off-peak periods but can extend to 9-11 weeks during tax season (January 15 through April 30).
Tax Obligations and Effectively Connected Income
Your tax obligations depend on whether your LLC earns Effectively Connected Income (ECI). If you actively operate a trade or business in the United States, you must file US tax returns and pay applicable taxes.
However, many international entrepreneurs structure their LLCs to avoid ECI through passive investments or foreign-sourced income. If your LLC earns income from outside the US or through passive means, you might not owe US income taxes.
Consult with a qualified international tax advisor to understand your specific situation. Learn more about US business formation for digital nomads.
Key Benefits of Getting an EIN (Even When Optional)
Beyond legal requirements, an EIN unlocks significant advantages for business growth and protection.
Building Independent Business Credit
Your business credit operates separately from your personal credit. An EIN enables you to establish business credit accounts with vendors who report to Dun & Bradstreet, Experian Business, and Equifax Business.
Strong business credit allows you to:
- Qualify for business loans with better interest rates
- Access higher credit limits on business credit cards
- Secure net-30 or net-60 payment terms with suppliers
- Lease equipment or office space under more favorable conditions
Start by opening a business bank account with your EIN. Then systematically add business credit accounts. Apply for a business credit card, establish vendor accounts with companies that report to business credit bureaus, and maintain perfect payment records.
Within 12-18 months of consistent on-time payments, your LLC can develop a credit profile robust enough to support significant financing decisions independent of your personal credit history.
Strengthening Vendor Relationships
Many wholesale suppliers, manufacturers, and B2B service providers require an EIN to establish accounts. They use it to verify your business legitimacy, check credit, and comply with their own tax reporting requirements.
Trade credit (net-30 or net-60 payment terms) dramatically improves cash flow. Instead of paying upfront, you receive goods, sell them, collect payment, and then pay suppliers. This arrangement requires the trust and verification that comes with proper business documentation, starting with your EIN.
Protecting Your Personal Identity
Every time you use your Social Security Number for business transactions, you increase identity theft risk. Invoices, contracts, vendor forms, and payment documentation all create paper trails containing your SSN.
An EIN shields your personal identity. You can conduct all business operations without exposing your SSN to clients, vendors, or service providers. Given the increasing sophistication of identity theft schemes, this protection alone justifies getting an EIN.
Positioning for Growth
Even if your LLC starts as a solo operation, an EIN prepares you to:
- Hire your first employee immediately when opportunity arises
- Add partners or members without complex restructuring
- Expand operations across multiple states
- Apply for business licenses in various jurisdictions
- Set up multiple payment processors for different revenue streams
- Pursue contracts with corporate clients who require vendor EINs
Starting with an EIN from day one eliminates the administrative burden of updating banks, processors, vendors, and client records later.
Maintaining Limited Liability Protection
Courts can “pierce the corporate veil” and hold you personally liable for business debts if you fail to maintain proper separation between personal and business affairs. Using your SSN for business transactions blurs this critical boundary.
An EIN reinforces legal separation between you as an individual and your LLC as a business entity. Combined with a registered agent service and proper record-keeping, an EIN helps preserve the liability protection that motivated your LLC formation.
How to Apply for an EIN
The IRS offers multiple free application methods. Never pay third-party services for something the IRS provides at no cost.
Online Application (Same Day)
If you have a valid Social Security Number or ITIN, apply online at IRS.gov. You’ll receive your EIN immediately upon completion.
Processing Time: Same day (instant upon submission)
The system operates Monday through Friday, 7:00 AM to 10:00 PM Eastern Time. The application takes approximately 15-20 minutes. You’ll need:
- Your SSN or ITIN
- LLC’s legal name (exactly as filed with your state)
- LLC’s formation date and state
- Registered agent information
- Business address
The IRS limits online applications to one per responsible party per day.
Phone Application for International Applicants (Same Day)
Nonresident aliens without SSNs or ITINs must call the IRS Business & Specialty Tax Line at 267-941-1099 (Monday through Friday, 6:00 AM to 11:00 PM Eastern Time).
Processing Time: Same day (EIN issued during the call)
Call early morning (6:00-7:00 AM ET) to minimize wait times. The agent will complete Form SS-4 over the phone and issue your EIN immediately.
Fax Application (4-6 Weeks)
Fax Form SS-4 to 855-641-6935 (within the US) or 304-707-9471 (international).
Processing Time: 4-6 weeks
Include a fax number where the IRS can send your confirmation.
Mail Application (6-8 Weeks)
Mail Form SS-4 to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Processing Time: 6-8 weeks
This method works for applicants not in a rush who prefer paper documentation.
Professional Service Through BusinessAnywhere
Form your LLC with BusinessAnywhere and we’ll handle your EIN application. This particularly benefits international entrepreneurs navigating the phone process. Our team ensures accuracy and matches your information to state formation documents perfectly.
Common EIN Application Mistakes to Avoid
Mismatched names: Your LLC name must match your state registration documents exactly, including punctuation. Copy directly from your Articles of Organization.
Incorrect formation dates: Use the date your state approved your LLC, found on your stamped formation documents.
Wrong responsible party: Must be an individual with an SSN or ITIN, not the LLC itself.
Address requirements: The IRS requires a physical US street address. Your registered agent’s address works if you don’t have another US location.
Multiple submissions: Submitting duplicate applications causes delays. Submit once and wait for processing.
What to Do After Receiving Your EIN
Once you receive your EIN confirmation letter, take these immediate steps:
Secure Your Documentation
Create both physical and digital copies of your EIN confirmation letter. Store them in multiple secure locations. You’ll need this document repeatedly for banking, licensing, and vendor relationships.
Open Your Business Bank Account
Most banks require an EIN to open business accounts. Separating business and personal finances is crucial for maintaining your LLC’s liability protection and simplifying tax preparation. Compare bank account options for LLCs to find the best fit.
For non-residents, review our guide on opening US bank accounts remotely.
Update Business Relationships
Provide your EIN to:
- Payment processors (Stripe, PayPal, Square)
- State tax agencies (if applicable)
- Vendors requiring tax documentation
- Anyone who previously used your SSN for business
Register for State Tax Accounts
Depending on your state and business activities, you may need to register for:
- State income tax withholding (if hiring employees)
- Sales tax permits (if selling taxable goods)
- Unemployment insurance
- Workers’ compensation
Visit your state’s Department of Revenue website to determine specific requirements.
Set Up Accounting Systems
Link your EIN to accounting software for proper financial tracking. Good record-keeping simplifies tax filing and helps identify deductible expenses.
Tax Filing Requirements After Getting Your EIN
Once you have an EIN, you must file required tax returns based on your LLC’s structure:
Single-member LLCs: Report income on Schedule C with your Form 1040. File Schedule SE for self-employment tax.
Multi-member LLCs: File Form 1065 (Partnership Return) and provide Schedule K-1 to each member.
LLCs taxed as S-Corps: File Form 1120-S and process payroll with proper withholding.
Foreign-owned LLCs: Must file Form 5472 annually, even with zero activity. Failure to file carries penalties starting at $25,000. Learn more about non-resident LLC requirements.
EIN Requirements for Different Business Scenarios
Understanding how EIN requirements apply to your specific situation helps you make informed decisions.
E-Commerce and Online Businesses
If you sell products online through platforms like Amazon, Shopify, or Etsy, you’ll need an EIN to:
- Set up merchant accounts and payment processing
- Manage inventory from suppliers who require tax documentation
- File sales tax in states where you have nexus
- Deduct business expenses properly
Many payment processors and marketplaces require EINs to comply with IRS reporting requirements.
Real Estate Investment LLCs
Real estate investors form LLCs to hold rental properties and protect personal assets. An EIN is essential for:
- Opening separate bank accounts for each property or LLC
- Filing Schedule E for rental income
- Working with property managers who need proper tax documentation
- Securing financing from lenders
Multiple property owners often create separate LLCs for each property, requiring multiple EINs. Learn more about LLC formation for real estate.
Freelancers and Consultants
Independent contractors and consultants benefit from LLC formation with an EIN even without employees. The structure provides:
- Liability protection from client disputes
- Professional credibility with corporate clients
- Easier contract negotiations for high-value projects
- Clear separation between personal and business income
Many corporate clients prefer or require working with incorporated vendors rather than individuals.
Digital Nomads and Remote Founders
Location-independent entrepreneurs face unique challenges. An EIN enables you to:
- Maintain US business operations from anywhere
- Open US bank accounts while living abroad
- Work with US clients requiring proper vendor documentation
- Build business credit without US residency
Our digital nomad business formation guide covers these scenarios in detail.
Multi-Member LLCs and Partnerships
Multi-member LLCs must obtain EINs regardless of other factors. The IRS classifies them as partnerships requiring:
- Annual Form 1065 partnership returns
- Schedule K-1 for each member
- Separate tax identification from members’ personal SSNs
Even if the LLC has no employees or other EIN triggers, the multi-member structure mandates federal tax identification.
Frequently Asked Questions
Do I need a new EIN if I convert my sole proprietorship to an LLC?
Yes. Each legal entity requires its own EIN. The IRS views your sole proprietorship and LLC as distinct entities.
Can I use the same EIN for multiple LLCs?
No. Each LLC needs a unique EIN regardless of ownership.
What if I lose my EIN confirmation letter?
Call the IRS Business & Specialty Tax Line at 800-829-4933. They’ll verify your identity and provide your EIN over the phone.
Can I get an EIN before forming my LLC?
No. You must first receive state approval for your LLC formation before applying for an EIN.
What’s the difference between an EIN and an ITIN?
An EIN identifies business entities. An ITIN identifies individual taxpayers without Social Security Numbers. You may need both.
How BusinessAnywhere Simplifies LLC Formation and EIN Applications
When you form an LLC through BusinessAnywhere, we handle your EIN application process. Our team completes Form SS-4 with accuracy, ensures information matches your state formation documents, and processes international applications via phone for nonresident aliens.
Our platform combines essential services in one dashboard:
- LLC Formation: $0 plus state fees
- Registered Agent Service: First year free, then $147 annually
- Virtual Mailbox: Starting at $20/month with unlimited mail scanning
- EIN Filing: Included with formation packages
- Compliance Tracking: Automated reminders for annual reports and filing deadlines
For international entrepreneurs, explore our Digital Nomad business formation guide or learn about opening a US bank account as a non-resident.
Taking Your Next Steps
If You Haven’t Formed Your LLC Yet
- Research the best state for your business needs
- Consider forming your LLC with BusinessAnywhere for streamlined EIN processing
- Plan your business structure and tax classification
If You Have an LLC But No EIN
- Determine if you legally require an EIN based on this guide
- Apply using the most appropriate method (online for same-day processing)
- Update all business relationships once you receive your EIN
If You’re an International Entrepreneur
- Understand whether you need both an ITIN and EIN
- Review our non-resident LLC formation guide
- Research bank account options for non-residents
Conclusion
An EIN is more than a nine-digit number. It’s the foundation of your business identity, protects your personal information, and unlocks growth opportunities. For most LLC owners, getting an EIN immediately upon formation provides benefits that compound throughout your business journey.
Ready to start? Contact BusinessAnywhere for a free consultation or begin your business registration today.
Disclaimer: This guide provides general information and should not be construed as legal or tax advice. Always consult qualified professionals for advice specific to your situation.
Last Updated: December 2025
