Does My LLC Need a Tax Number?

An EIN—or Employer Identification Number—is a number that the Internal Revenue Service uses to identify business entities and ensure that each is upholding their tax responsibilities. An EIN is necessary for all business entities except for partnerships, as the owners of a partnership take personal responsibility for all business debts and liabilities. An LLC needs an EIN in order to remain in compliance with tax laws. There is one exception to this rule, however.

Single Owner LLC

If an LLC is owned by a single individual, and if that individual does not employee any employees or independent contractors, they do not have to obtain an EIN, as they are personally accountable for the business’s taxes. In this instance, they would use their own social security number to file state and federal taxes. However, if the owner is a sole proprietor who files excise tax returns or pension, they must obtain an EIN—even if they operate without a partner or partners and do not have any employees.

When an LLC Must File for a New EIN

In some instances, an LLC must obtain a new EIN than the one it previously had. These instances are:

  • When a current business is acquired or inherited by the LLC;
  • When a prevailing business is acquired or inherited by someone who plans to run said business as a sole proprietorship;
  • When the LLC coverts from a sole proprietorship to a corporation or a partnership;
  • When the LLC converts from a corporation to a sole proprietorship or a partnership;
  • When the LLC converts from a partnership to a sole proprietorship or a corporation; or
  • An owner of a single-owner LLC dies and the business is taken over the individual’s estate.

To start the processing of filing for a tax ID number, fill out the form here.