A special needs trust is used to provide for the needs of an individual with a disability. It ensures that government benefits are properly spent and allows family members and others to put money aside to continue care into the future. The trust is an independent entity and must file income tax returns, just like a business. To file tax returns with the Internal Revenue Service (IRS), the trust must obtain a taxpayer identification number (TIN), also known as an employer identification number (EIN), that the IRS will use to track the trust while it remains in existence.
IRS Form SS-4, Application for an Employer Identification Number, is used to request an EIN assignment from the IRS by independent business entities and trusts. An EIN is analogous to an individual's Social Security number, and it serves as the trust's primary means of identification while it is in existence. Even though a special needs trust will not likely operate as an employer, the EIN is used to identify the trust when it files its tax returns.
The IRS allows you to fill out a Form SS-4 in two ways. You can download a PDF version of the form with instructions from the IRS website, or you can fill out the form online through the agency's web-based system. If you download the form, you can submit it by fax or by mail. Alternatively, you can apply for an EIN over the phone by reading the answers from a completed Form SS-4 to an agent who will process it and assign you a number at the end of the conversation.
Anyone who is authorized to act on behalf of the trust, such as the trustee or a lawyer, can fill out Form SS-4. The first section of the form requires you to provide the name and address of the trust and to indicate the name and TIN of the trustee. Section 9a requires you to indicate the type of entity applying for the EIN. Select "Trust" and indicate the Social Security number of the trust donor. Section 10 requests the reason for applying for an EIN. Select "Created a trust." In the space provided to identify the type of trust, indicate "Special Needs Trust." The rest of the questions on the form apply to businesses and not trusts, so sign and date the form to complete it.
The online form mirrors the paper form exactly. If you choose to use the online EIN application system, you will receive a number with an IRS confirmation letter immediately upon submitting the form electronically. Save the confirmation letter for the trust's records. If you apply for the EIN over the phone, you will also receive the number immediately, but you will have to wait for the confirmation letter to arrive in the mail. If you submit the form by mail or fax, you will have to wait for a number to be assigned and the confirmation letter, which can take weeks.