A trust is a legal arrangement that allows property to be held for the benefit of a named beneficiary. There are a variety of trusts that can fit almost any legal purpose. However, if a trust is not a grantor trust or the trust is created by two or more people, you will need to set up a tax identification number for the trust. A grantor trust is a living revocable trust in which the grantor maintains control of the trust and is the primary beneficiary. Therefore, a separate federal tax identification number is not necessary because the trust’s income is reported using the grantor’s Social Security number.
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Gather the information you will need to apply for the EIN. For example, Form SS-4 will ask you to provide information about the trust including the name of the trust, the trustee's name, and the mailing address for the trust. In addition, the IRS will want to know the grantor’s Social Security number, the type of trust and the date the trust was funded.
Obtain Form SS-4 from the IRS. The form is available on the IRS website, and through one of the IRS local offices.
Complete Form SS-4 according to the instructions to obtain an Employment Identification Number, or EIN. The EIN is the same thing as a trust’s federal taxpayer identification number, or TIN. You can complete Form SS-4 online, by phone, fax or through the mail.
Wait to receive the EIN. If you apply for an EIN online or over the phone, the IRS will issue the number immediately.
Tips & Warnings
Use the trust's EIN to open all necessary accounts for the trust. For example, you may want to open a bank account or brokerage account for the trust. When opening a trust account, the bank will ask for the trust's EIN.
Include the EIN on the trust’s federal tax return. When filing the trust’s tax return with the IRS, the income and deductions of the trust, in addition to any income the beneficiaries have received must be filed with the IRS. The EIN provides a method for the IRS to track the trust's transactions and ensure all taxes are appropriately paid.
If you have any questions about whether it is necessary to obtain a tax identification number for a trust, contact a licensed attorney in your state.
References & Resources
- Internal Revenue Service: Form SS-4, Application for Employer Identification Number
- Internal Revenue Service: How to Apply for an EIN
- Law Offices of James F. Gulecas, P.A. : Taxpayer Identification Number Requirements for Grantor Trusts
- Internal Revenue Service: 2012 Form 1041-Es, Estimated Income Tax for Estates and Trusts
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