What is an EIN and how do you get one?
Short answer: The IRS says, "An EIN is a federal tax ID number for businesses, tax-exempt organizations and other entities."
Reviewed by the Red Spectrum Customer Support Team. Last reviewed .
What an EIN is
EIN stands for employer identification number. Think of it as a number that names your business to the federal tax office. A person has a number of their own. A business can have one too.
The IRS describes it this way: "An EIN is a federal tax ID number for businesses, tax-exempt organizations and other entities."
Who needs one
The IRS lists reasons a business needs an EIN. One of them is that you "Have employees." The IRS page has more reasons. Read the list on the IRS page for your own case.
We do not tell you whether you need one. Your situation may be different. The IRS page or a qualified tax professional can help.
What it is used for
The SBA connects the EIN to banking. It says, "getting a DBA and federal tax ID number (EIN) allows you to open a business bank account."
A business bank account helps keep business money in one place. Read business credit vs personal credit to see why that matters.
How to get one
The IRS says, "You can get an EIN for free directly from the IRS in minutes."
Here are the steps in plain words.
- Go to the IRS website, irs.gov.
- Find the page for employer identification numbers.
- Apply on that page.
- Save the number in a safe place.
Be careful with the number. Do not post it on a public web page. Only share it with people who have a reason to ask.
What an EIN does not do
An EIN is a tax ID number. This page does not say it creates a credit record, a score or a loan. We found no source that says so, so we make no claim.
How it connects to Red Spectrum
Red Spectrum is a membership for small business owners in the United States. A member gets a net-30 vendor account and spends it on real business services from our catalog. Every membership payment and every catalog repayment is reported to Factiiv. We report to Factiiv and nowhere else.
No guarantee of funding, loan approval or credit scores. Payment activity is reported to Factiiv.
See business credit basics for the whole picture.
Questions people ask
What is an EIN?
The IRS says, "An EIN is a federal tax ID number for businesses, tax-exempt organizations and other entities."
Does it cost money to get one?
The IRS says, "You can get an EIN for free directly from the IRS in minutes." Be careful with any site that asks for a fee. Start from irs.gov.
Does an EIN give me business credit?
We found no source that says so, so we make no claim.
Sources
- IRS, Employer identification number · https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers · checked
“An EIN is a federal tax ID number for businesses, tax-exempt organizations and other entities.”
- IRS, Employer identification number · https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers · checked
“You can get an EIN for free directly from the IRS in minutes.”
- SBA, Manage your finances · https://www.sba.gov/business-guide/manage-your-business/manage-your-finances · checked
“getting a DBA and federal tax ID number (EIN) allows you to open a business bank account.”
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