Learn when you might need to have an employer ID number, how to complete IRS form SS-4 to apply for this number, and where to submit the form.
Who Needs To Fill Out Form SS-4?
Filling out an SS-4 form to get an Employer ID Number should be one of your first tasks when you start your small business or before you hire employees. You need an EIN if you:
Have employees or you are hiring employees for the first time Operate your business as a corporation or a partnership Must pay employment taxes (Social Security and Medicare tax for employees, for example) Must pay excise taxes or alcohol, tobacco, and firearms taxes Withhold taxes on income, other than wages, paid to a non-resident alien Have a Keogh plan
Limited Liability Companies: A Special Case
A limited liability company (LLC) with one member (owner) is taxed as a sole proprietor, and LLCs with multiple members are taxed as partnerships. Some LLCs elect to be classified as a corporation or S corporation. An LLC will need an EIN if it has employees or if it is required to file excise tax forms. A new single-member (owner) LLC will need an LLC. A single-member LLC that pays taxes using Schedule C and that doesn’t have employees doesn’t need an EIN. It should use the name and taxpayer ID of the owner for federal income tax purposes.
Instructions for Filling Out Form SS-4
Form SS-4 has three main sections: general information, information about your business type, and other business information. Here’s what you need to know about each section.
General Information
In the general information section, you complete basic facts about your company.
Line 1: The legal name of your business and the trade name, if different Line 2: The trade name of your business, the “doing business as (DBA) name,” sometimes called a “fictitious name” Line 4: The mailing address of your businessLine 3: Only required for trusts and estates Line 7a and 7b: Information about the responsible party for your business and their tax ID number
Business Type
The second section of form SS-4 asks for details about the type of business you are filing for.
Lines 8a, 8b, and 8c: Whether the company is a limited liability company (LLC), the number of LLC members, and whether it was organized in the US. Lines 9a and 9b: Your business legal type. Line 9b is for corporations, to designate where the corporation was formed (in a U.S. state or foreign country).
If your business is a single-owner LLC, check the “Sole Proprietor” box and enter your Social Security number. If your business is a multiple-owner LLC, check the “Partnership” box. If your business is a corporation and you have elected to be taxed as a corporation or an S corporation, check the “Corporation” box. You will also have to enter the correct tax form: Form 1120 for corporations and Form 1120-S for S corporations.
Other Information
Finally, the last portion of SS-4 asks for more details about what you are applying for an EIN. Don’t apply if you already have an EIN and you are only adding another business location or you are hiring employees, not making some other change to your business.
Line 10: Your reason for applying. Check the appropriate box. Choices range from starting a new business to creating a pension plan. Line 11: Date business started or acquired. Enter the appropriate date. Line 12: Closing month of your business accounting year. For example, many businesses use Dec. 31 as a closing date. Line 13: Highest number of employees expected in the next 12 months. If you don’t expect to hire employees, enter “0” in the appropriate box. Line 14: Do you want to file IRS Form 944? This form is for small businesses that have few employees and that expect to pay less than $1,000 in employment taxes in a calendar year. You can check the box on Line 14 to elect to use this form instead. Line 15: First date wages or annuities were paid. If you have employees, enter the date when you expect to begin to pay wages. If you don’t plan to have employees, enter “N/A.” Line 16: The principal activity of the business. If you aren’t sure how to classify your business, the Instructions for Form SS-4 publication has a list of descriptions of the various business activity types.
The information you provide on Form SS-4 has tax implications for your business. If you are unsure of how to answer any of the questions, get help from a licensed tax professional or tax attorney.
How To File Form SS-4 for the EIN Application
There are several ways to file your EIN application. You can submit an online application to receive your EIN immediately. You can also apply by fax or by mail. The phone application option is only available to international applicants. Use Lines 8a-8c of Form SS-4 to enter information about the LLC. Then use the appropriate box on Line 9a to enter the information about your LLC. Otherwise, the fax number is 855-215-1627 (if you are faxing from within the U.S.) or 304-707-9471 (if you are faxing from outside the U.S.) If you don’t know your EIN, you may also be able to get it from one of several places: the IRS notice from when you applied; a bank you used to open a bank account or apply for a loan; or a state or local licensing agency. Your previous year’s tax return may also include your EIN.
