Who Needs an EIN-Small Business and LLC Requirements

Jan. 2, 2026, 5:32 p.m.
An Employer Identification Number (EIN) is a unique 9-digit number issued by the IRS to identify a business for tax purposes. Think of it as a Social Security Number (SSN) for your business.
EIN for Small Businesses and LLCs

Who Needs an EIN?

1. Businesses With Employees

  • If your business hires employees, you must have an EIN to report employment taxes.

  • This includes full-time, part-time, and household employees.

2. Corporations and Partnerships

  • Corporations (C-Corp or S-Corp): EIN required, even if you’re the only owner.

  • Partnerships: Must have an EIN to file partnership tax returns (Form 1065).

3. Limited Liability Companies (LLCs)

  • Single-member LLCs: Usually not required to get an EIN unless they hire employees, have excise tax obligations, or need to open a business bank account.

  • Multi-member LLCs: Always need an EIN to file partnership taxes and separate owner liabilities.

4. Nonprofits

  • 501(c)(3) organizations and other nonprofits need an EIN to apply for tax-exempt status and open bank accounts.

5. Trusts, Estates, and Other Entities

  • Certain trusts, estates, and governmental entities require an EIN for tax purposes.

When a Sole Proprietor Needs an EIN

Even if you run a sole proprietorship, you need an EIN if:

  • You hire employees

  • You operate as a partnership or corporation

  • You need a business bank account separate from your personal account

  • You withhold taxes on income, such as for contractors

How to Apply for an EIN

Tip: You’ll get your EIN immediately if you apply online.

Key Takeaways

  • Almost all LLCs, corporations, and partnerships need an EIN.

  • Sole proprietors may only need an EIN if hiring employees or separating business finances.

  • Getting an EIN is free and usually instant online.

  • Having an EIN simplifies tax filing, banking, and legal compliance.