Starting a business in the United States involves various steps, with one of the most critical being obtaining an Employer Identification Number (EIN). Issued by the Internal Revenue Service (IRS), an EIN is essential for conducting many business-related activities, such as filing taxes, opening a business bank account, and hiring employees. To obtain an EIN, you need to complete Form SS-4, the official application form for this tax identifier.
This comprehensive guide delves into the purpose, importance, and detailed steps for filling out Form SS-4. It also provides insights into common challenges and solutions to ensure your EIN application process is seamless.
What Is Form SS-4, and Why Do You Need It?
Form SS-4, or the Application for Employer Identification Number, is a document used to apply for an EIN. This unique, nine-digit number is the cornerstone of business identification for federal tax purposes. The IRS uses your EIN to track business activities, while banks and other institutions require it to verify your business identity.
Why Is an EIN Important?
An EIN is necessary for numerous business functions, including:
- Filing Federal and State Taxes: It’s required for all entities except some sole proprietorships without employees.
- Opening a Business Bank Account: Banks won’t allow you to open an account without an EIN.
- Hiring Employees: An EIN is essential for payroll taxes, employee benefits, and W-2 filings.
- Establishing Credit: Helps businesses build credit separate from the owner’s personal credit history.
- Obtaining Business Licenses: Many local and state permits require an EIN.
Without an EIN, a business faces obstacles in achieving operational, financial, and regulatory milestones.

Who Needs an EIN?
Not all businesses are required to obtain an EIN, but many are. Entities that must file Form SS-4 include:
Businesses That Require an EIN
- Sole Proprietorships: If you have employees or file excise taxes, you need an EIN.
- Partnerships: All partnerships require an EIN to file taxes and operate legally.
- Corporations: This includes S-Corps and C-Corps, both of which are mandated to have an EIN.
- LLCs (Limited Liability Companies): LLCs need an EIN, regardless of their tax classification (sole proprietorship, partnership, or corporation).
Other entities requiring an EIN include trusts, nonprofits, and estates of deceased individuals.
Special Considerations for LLCs
An LLC (Limited Liability Company) is a flexible business structure that can be taxed in several ways: as a sole proprietorship, partnership, or corporation. Regardless of its tax designation, an LLC must obtain an EIN to:
- Open a business bank account.
- File federal and state tax returns.
- Establish payroll for employees.
Single-Member LLCs
A single-member LLC is often classified as a disregarded entity for tax purposes, meaning it reports taxes under the owner’s name. However, it still needs an EIN for banking, licensing, and employer-related purposes.
Multi-Member LLCs
A multi-member LLC is classified as a partnership unless it elects to be taxed as a corporation. An EIN is required for all partnership tax filings.
How to Complete Form SS-4: Step-by-Step Instructions
Filling out Form SS-4 may seem complex at first, but breaking it into manageable steps makes the process much easier.
Step 1: Business Identification
- Legal Name: Enter the official name of your business, as registered with the state or listed on legal formation documents.
- Trade Name (DBA): If your business operates under a different name, include the “Doing Business As” (DBA) name here.
- Mailing Address: Provide the address where the IRS can send correspondence, such as your EIN confirmation letter.
Step 2: Entity Type
Specify the type of entity applying for the EIN. Options include:
- Sole Proprietorship
- Partnership
- Corporation
- LLC
If you’re unsure of your classification, consult a tax professional or refer to the IRS’s business entity guide.
💡 Tip: For LLCs, indicate whether you’re a single-member or multi-member entity. If you’ve chosen to be taxed as a corporation, ensure the IRS is aware.
Step 3: Reason for Applying (EIN)
Indicate the reason for requesting an EIN. Common reasons include:
- Starting a new business.
- Hiring employees.
- Changing the structure of an existing business (e.g., converting from sole proprietorship to LLC).
- Opening a business bank account.
Step 4: Responsible Party
The responsible party is the person who controls or manages the business. This individual must provide:
- Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
- Contact information, including phone and email.

Step 5: Business Activity Description
Accurately describe the nature of your business. This helps the IRS classify your business correctly for tax purposes. Examples include:
- Retail clothing sales.
- Digital marketing services.
- Software development.
💡 Pro Tip: Be specific about your industry and primary activities. This avoids delays or requests for clarification from the IRS.
Step 6: Filing Method for EIN
You can file Form SS-4 using one of three methods:
1. Online Submission
- Fastest Option: Receive your EIN immediately after completing the online application.
- Eligibility: Only available for U.S.-based businesses.
Access the IRS online portal here.
2. Fax Submission
- Processing time: Approximately 7 business days.
- Include a return fax number for faster response.
3. Mail Submission
- Processing time: 4–6 weeks.
- Use this method if online or fax options are unavailable.
4. Work with a Company
- Processing time: 4 weeks.
- Use this method if you need your EIN as soon as possible.
💡 Suggestion: IncUnit provides free EIN consultation. Here is the website – IncUnit.com
Common Challenges and How to Overcome Them
1. Incorrect Entity Selection
Ensure you understand your business’s legal structure before completing Form SS-4. Misclassification may result in tax issues.
2. Incomplete or Inconsistent Information
Double-check all fields to ensure consistency with state and federal filings.
3. Delayed Processing
Online filing is the fastest method. If you must use fax or mail, plan for delays and file well in advance.
What Happens After You Receive Your EIN?
Once you receive your EIN, it becomes your business’s permanent tax identifier. However, there are instances where you’ll need to update the IRS about changes to your business, such as:
- Change of Responsible Party
File Form 8822-B to update the IRS about a new responsible party. - Change in Business Structure
If your business changes its entity type, such as transitioning from a sole proprietorship to an LLC, you may need to apply for a new EIN. Contact professionals since this is a highly technical/legal task.
Conclusion: Setting Your Business Up for Success
Obtaining an EIN through Form SS-4 is a crucial step in establishing and legitimizing your business. Whether you’re forming an LLC, hiring employees, or simply opening a business bank account, having an EIN streamlines operations and ensures compliance with IRS regulations.
By following this guide, you’ll complete Form SS-4 with confidence and accuracy. For additional resources, visit the IRS website to stay informed about updates, changes, and related requirements.