How to Get a Tax ID Number for a New Business

What a Tax ID Number Is (and Which One You Actually Need)

A “tax ID number” is a general term that can refer to different identification numbers used for tax reporting and business registration. For most new businesses, the tax ID number you’re looking for is an Employer Identification Number (EIN). Other common tax-related IDs include:

• EIN (Employer Identification Number): Federal business tax ID used with the IRS for hiring, payroll, income tax filings, and many business banking needs.
• SSN (Social Security Number): Sometimes used by sole proprietors with no employees, but often replaced by an EIN for privacy and business separation.
• State tax IDs: Numbers issued by a state for payroll withholding, unemployment insurance, and sales and use tax (varies by state and business activity).

If you are forming a company, opening a business bank account, hiring employees, or registering for state tax programs, an EIN is typically the starting point.

When a New Business Needs a Federal EIN

You generally need an EIN if your business:

• Has employees (or plans to hire)
• Operates as a corporation or partnership
• Files certain federal tax returns (employment, excise, or certain alcohol/tobacco/firearms filings)
• Withholds taxes on income paid to a non-resident alien
• Needs to open a business bank account or apply for business credit (often required by banks and lenders)

Common situations where an EIN is recommended even if not strictly required

• Sole proprietors: Useful to avoid using an SSN on W-9s and invoices.
• Single-member LLCs: Often needed for banking, payroll setup, and vendor onboarding.
• Online sellers: Helpful when setting up payment processing, wholesale accounts, and state registrations.

Information You’ll Need Before You Apply

Gather these details to avoid delays:

• Legal business name (exactly as formed/registered)
• Trade name/DBA (if different)
• Business address and mailing address
• Entity type (sole proprietor, LLC, partnership, corporation, etc.)
• Responsible party (name and taxpayer ID; typically an owner or officer)
• Reason for applying (new business, hired employees, banking needs, etc.)
• Start date and brief description of business activity/industry

Step-by-Step: How to Get a Tax ID Number (EIN) for a New Business

Step 1: Confirm your business structure

Your entity type affects how the EIN is issued and how your business is taxed. For example, an LLC may be taxed as a sole proprietorship, partnership, or corporation depending on elections and ownership.

Step 2: Identify the responsible party

The responsible party is the individual who controls, manages, or directs the business and its funds. This person’s taxpayer ID is used to link the EIN to the business for IRS records.

Step 3: Apply for the EIN

You can apply and receive an EIN confirmation for most standard new-business scenarios. Many business owners choose an online application process. If you’re ready to begin, use the tax identification number application to start the process.

Step 4: Save your EIN confirmation and standardize your records

Once assigned, keep your EIN confirmation accessible and ensure your business name and address match across:

• Bank accounts
• State registrations
• Payroll provider setup
• Vendor forms (W-9 requests)
• Business licenses and permits

Step 5: Register for state tax accounts if needed

Depending on what you sell and whether you have employees, you may need separate state accounts for sales tax, employer withholding, and unemployment insurance. These are different from an EIN and are issued by the state.

After You Get Your EIN: Next Compliance Steps for New Businesses

Getting a tax ID number is often the first milestone. Next, consider these practical compliance steps:

• Open a business bank account and keep business funds separate from personal funds.
• Set up payroll correctly before the first hire, including withholding and employer tax accounts.
• Confirm your business details are accurate across filings and profiles; if you’ve made changes, review company information successfully updated to keep records consistent.
• Track filing deadlines for income tax, payroll filings, and sales tax returns (if applicable).

Common Mistakes to Avoid

• Using inconsistent business names: Switching between legal name and DBA without clarity can create bank and vendor verification issues.
• Applying before forming the entity (when applicable): If you plan to form an LLC or corporation, align formation details first so the EIN matches the final legal structure.
• Mixing up EIN vs. state tax IDs: An EIN is federal; sales tax and employer accounts are usually state-level.
• Not updating changes: Address changes, ownership changes, or entity conversions should be reflected consistently across accounts.

FAQ: Getting a Tax ID Number for a New Business

1) Is a tax ID number the same as an EIN?

Often, yes. In everyday business use, “tax ID number” typically means an EIN. However, “tax ID” can also refer to state-issued IDs (like sales tax permits) depending on context.

2) Can I get a tax ID number before I start making money?

Yes. Many businesses obtain an EIN at the beginning so they can open a bank account, set up payment processing, register for state taxes, and complete vendor paperwork.

3) Do I need an EIN if I’m a sole proprietor with no employees?

Not always, but many sole proprietors still get an EIN to avoid using an SSN on forms and to present a more standardized business profile to banks and vendors.

4) Does a single-member LLC need a tax ID number?

A single-member LLC may use the owner’s SSN for certain tax purposes, but an EIN is commonly needed for banking, payroll (if hiring), and many vendor onboarding requirements.

5) What is the “responsible party” on an EIN application?

The responsible party is the person who ultimately owns or controls the business or who exercises effective control over its finances and decisions. This is typically an owner, managing member, or corporate officer.

6) Can I use one EIN for multiple businesses?

Generally, each separate legal entity needs its own EIN. A single entity operating multiple lines of business may still use one EIN, but separate LLCs or corporations typically require separate EINs.

7) What if my business address changes after I get my EIN?

You should update your business address wherever it is used for official records (banking, state accounts, payroll providers, and other registrations) to keep filings consistent and avoid verification problems.

8) Will getting an EIN automatically register me for sales tax?

No. Sales tax registration is usually a separate state process. If you sell taxable goods or services in a state, you may need a sales tax permit and periodic sales tax returns.

9) Do nonprofits and churches need a tax ID number?

Yes. Most nonprofits obtain an EIN as a foundational step for banking, donations processing, and filings. Tax-exempt status is separate and requires additional steps beyond obtaining an EIN.

10) What should I do if my business name is different from my DBA?

Use your legal name for official registrations and tax records, and use your DBA for branding and customer-facing materials. Keep documentation consistent so banks and vendors can verify both names.

More Topics to Explore

• • 2026 Tax Identification Number Application
  • Business Tax ID Resources
  • Start a new tax ID application for a new business