Questions And Answers, Tax

Q&A: Is there a scenario where I do not need EIN?

What is an EIN number

Generally, all types of businesses without looking at their size and the number of employees must get an EIN. Therefore, you are required to have an EIN if you have a company in the US, but in some cases, you may not need to have one at all. EIN is used by the IRS – Internal Revenue Service to keep track of businesses and their tax responsibilities. In this context, some types of businesses that are not legally separated from their owners do not need an EIN.

For instance, if you have a sole proprietorship or single-member LLCs without any employees, you may, of course, use your social security number instead of an EIN or tax ID. These two types of businesses do not need to have an EIN. However, it is safe to say that having one confers some has advantages even if it is not required. EIN is beneficial and may required when you hire employees, establish a payroll, get special licenses and local permits, open a bank account and etc.