What is the difference between an EIN and an FEIN?

If you’re starting a business, you may be confused about the differences between a federal employer identification number (FEIN) and an employer identification number (EIN). Essentially, there is no difference of a FEIN vs. EIN. The terms are used interchangeably to describe the nine-digit number used by the Internal Revenue Service (IRS) for tax purposes. Read below to learn more about whether you need an EIN and how you can apply for a tax ID online.

What Is a FEIN Number?

You need an EIN or FEIN number so the IRS can identify your business and track its taxes. You may also need to obtain a tax ID number to establish a bank account or credit card for your company. All corporations, partnerships, and businesses with employees must obtain an EIN to operate legally.

Do I Need One As a Sole Proprietor or Single-Member LLC?

If your business is an LLC with one member or a sole proprietorship without employees, you do not need an EIN for tax purposes. However, you may need one for banking or credit purposes. Otherwise, you can use your Social Security number for business and taxation purposes. However, if you hire employees as a sole proprietor or your LLC gets another member, you must apply for an EIN or complete an LLC online filing.

How Do I Get an EIN or FEIN?

Acquiring an EIN is easy. You can get one by applying online via GovDocFiling. You must provide details about your business such as the legal name and address for your company and its authorized representative. After submitting your application, you’ll get your EIN via email within one hour*.

*Most EINs are processed same or next business day, unless bundled with state formations, processing times will vary.

Why do Banks and Other Lenders Require an EIN?

Banks and other lenders require an EIN for the same reason that they require Social Security numbers of individual consumer customers—to track and report tax information. Many businesses have tax obligations related to their financial accounts for reasons that are as varied as the companies themselves. For interest-bearing deposit accounts, there might be additional tax obligations that come from the income generated by that interest. For loans, it can be a number of factors, including tax incentives and credits related to paid loan interest.

How Quickly Can I Use My EIN for Banking Purposes?

In theory, you can start to use your EIN or FEIN as soon as you receive it, but in practice, the record might not be active in every single database right away. While you probably don’t want to wait until you get the paper record, you will want to be patient if there are delays processing documents before it comes in. Your record will appear in all relevant databases as it percolates through the various systems it needs to be recorded in, so you can count on it and use it right away.

Is There Any Circumstance Where an FEIN is Needed Over an EIN?

No. The two terms are interchangeable, and if you have one number, you can enter it into forms that ask for the other. They are both terms for unique 9-digit tax identification numbers provided by the IRS to companies in the U.S. There is no reason why you need to go out of your way to access an FEIN if you have an EIN or vice-versa.

Apply for Your EIN Today

If you are ready to apply for your EIN, the process is simple:

  • Fill out the simple form for your entity type
  • Submit the form and your payment
  • Wait for the confirmation email that contains your EIN.

Now you don’t have to be confused anymore about the differences between an EIN and FEIN–they are the same thing. If you need to get one, apply for an EIN online with GovDocFiling’s streamlined application process.

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