Getting an EIN is an essential step to starting your California business. We know registering a California LLC or incorporating can come with its fair share of paperwork. Luckily, obtaining an EIN can be pretty straightforward.
Below we explain what an EIN is, what it’s used for, and how to secure an EIN from the IRS today.
An EIN (Employer Identification Number) is a unique nine-digit number assigned to your business by the Internal Revenue Service (IRS) for tax reporting purposes. It works like a Social Security Number for your business, making it easier for the IRS to identify your business entity.
You might encounter a few variations on how EINs are referred to, including:
Key Takeaway: An EIN is basically like an account number issued by the IRS to help identify your business. It is a federally assigned identifier, which means an EIN is not issued by the California Secretary of State.
No, a California Tax ID number is not the same as an EIN. Since the IRS is a division within the federal government, your EIN is assigned at the federal level. It is a 9-digit number formatted xx-xxxxxxx.
A California Tax ID Number (commonly referred to as a “California corporate number”) is assigned by the California Secretary of State Franchise Tax Board (FTB) at the state level. If you have a registered California business, you must have a California corporate number and pay the annual franchise tax. For LLCs, the California FTB assigns a 12-digit corporate number. Corporations receive a 7-digit corporate number. You can visit our California Franchise Tax page to learn more.
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Virtually every business entity needs an EIN. Technically, if you run a sole proprietorship or a single-member LLC with no employees and no excise tax return, pension, profit-sharing, or retirement plan, you are not required to obtain an EIN. But that’s a pretty rare scenario.
Even if your business is not required to have an EIN, we strongly encourage you to secure an EIN because you’ll need it when you want to open a business bank account or a line of credit. The alternative will be to list your Social Security Number for everything. That’s not a wise move if you want to avoid identity theft. Plus, an EIN opens doors for ways to protect your personal assets.
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Your business will need an EIN for federal tax purposes. More specifically, you will need an EIN when you file your tax return. But there’s a lot more that you can do with an EIN number:
Chances are that you will be required to get an EIN for your business anyway. Even if your business isn’t required to have an EIN, what’s useful about having one is that it helps set boundaries between your personal and company assets. That’s important because if you the government ever scrutinizes your finances, you do not want your personal and business finances mixed in with each other.
Key Takeaway: You are legally required to obtain an EIN in most cases (find out if you’re one of those cases with this IRS questionnaire). Even if it’s not required for your business, you should get an EIN anyway because it can help you protect your personal assets.
To get an EIN for your California business, you will need to file a Form SS-4 with the IRS. For US citizens or residents with a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN, you can apply online for the fastest and simplest processing. Otherwise, you have options to file via fax, mail, or phone. Since the IRS provides EINs as a free service, you get a free EIN regardless of how you choose to file.
You will need to provide the name of a “responsible party”—this is the individual or entity who controls, manages, or directs your business entity and its finances). You will also need to provide the Taxpayer Identification Number (typically, this would be your SSN or ITIN) of the responsible party. Here’s a breakdown of each application method:
Internal Revenue Service Attn: EIN Operation Cincinnati, OH 45999
If you are a US citizen or resident with an SSN, we suggest applying online through the IRS online portal since it is the fastest and simplest method. Remember, an EIN is free of charge, required of virtually every business, and can help your company open a business bank account.
When you hire us for service, you can have us handle the entire EIN process for you right then and there for just $50 ($199 if filing without an SSN).
Just add “Tax Id” at checkout to get your EIN immediately!
Registered Agent Service Incorporation Service
We’ve covered what an EIN is, why it’s important, and how to get one. Here are some of the most common questions our clients ask us about Tax ID numbers in California.
If you are forming an LLC or starting a corporation in California, you should not apply for an EIN until after your company is officially registered with the state. Why? Because if for some reason your LLC is not approved and you have to make changes for refiling, then you will have to cancel your EIN and get a new one from the IRS. Plus, you will want to have all of your company information on hand when applying for your EIN, including the company’s name and mailing address, the names and addresses of other members or managers, and the formation documents for your company.
EIN services are provided for free by the IRS. If you apply yourself online, it shouldn’t cost you any money to get an EIN.
That depends on your application method. If you apply online, you can secure an EIN immediately. If you apply by mail, it can take up to 4 weeks to get an EIN.
Not always. Some banks may allow you to open a business bank account with just your personal Social Security Number.
You can obtain a California State Employer Identification Number (SEIN) through the California Employment Development Department (EDD). It’s free of charge and you can apply through their e-Services for Business portal.
You can call the IRS to look for your EIN by calling the Business & Specialty Tax Line at (800)829-4933. Hours of operation are 7 a.m. to 7 p.m., Monday through Friday.
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