Do LLC Companies Need an EIN Number?

By Tom Speranza, J.D.

Do LLC Companies Need an EIN Number?

By Tom Speranza, J.D.

If you've started a business that operates as a limited liability company (LLC), you might wonder whether you have to obtain a federal employer identification number (EIN) for the LLC. The U.S. Internal Revenue Service (IRS) issues EINs and has published guidelines about which LLCs must have EINs.

Man smiling on phone while typing on laptop while wearing suit

When is an LLC required to have an EIN?

Generally speaking, an LLC needs an EIN as soon as the LLC's business involves two or more owners or the law requires the LLC to function as a taxpayer separate from its owners.

There are three major factors that trigger the requirement to get an EIN:

Having Employees

If your LLC has workers who provide services to the business as employees—and not independent contractors—your LLC must have an EIN so that you can report and pay federal, state, and local income and employment taxes for the employees.

An LLC with employees must issue an annual Wage and Tax Statement (Form W-2) to each employee detailing:

  • The gross wages, salary, and other compensation paid to the employee
  • The federal, state, and local income withheld from the compensation and paid to the tax authorities on the employee's behalf
  • The Social Security and Medicare taxes withheld and paid to the IRS on the employee's behalf

In contrast, if your LLC uses independent contractors as workers, you issue an annual Miscellaneous Income statement (Form 1099-MISC) to each contractor that shows the total fees paid to the contractor during that year. Payments made to contractors are typically not subject to withholding requirements.

Keep in mind that if you are an owner of an LLC taxed as a disregarded entity or partnership, you cannot also be an employee of the LLC.

Being Taxed as a Corporation or Partnership

When an LLC has one member, the IRS considers it a disregarded entity, and the member reports the LLC's income and expenses on their individual tax return just like a sole proprietorship. Disregarded entities use tax documents Profit or Loss From Business (Schedule C), Supplemental Income and Loss (Schedule E), and Self-Employment Tax statement (Schedule SE). A disregarded entity is not required to have an EIN.

If an LLC has two or more members:

  • The IRS considers it a partnership.
  • The LLC files an annual U.S. Return of Partnership Income (Form 1065) and reports income or loss to the members using Partner's Share of Income, Deductions, Credits, etc. (Schedule K-1 to Form 1065), and the members use the K-1 to include the income/loss in their individual tax returns.

Any LLC taxed as a partnership must obtain an EIN.

If an LLC elects to be taxed as a S corporation or C corporation by filing with the IRS an Entity Classification Election (Form 8832), the IRS considers the LLC a corporation for tax purposes.

Any LLC taxed as a corporation must obtain an EIN.

An LLC electing S corporation tax treatment files an annual U.S. Tax Return for an S Corporation (Form 1120S) and reports income or loss to the members using Schedule K-1, and the members use Schedule K-1 to include the income/loss in their individual tax returns.

An LLC electing C corporation tax treatment files an annual U.S. Corporation Income Tax Return (Form 1120) and does not pass its income or losses to members.

Being Required to File Certain Types of Tax Returns

If your LLC's business activities require it to file Employment, Excise, or Alcohol, Tobacco, and Firearms tax returns, you must obtain an EIN.

  • Employment tax returns include Forms 940, 941, 943, 944 and 945.
  • Excise tax returns include Forms 720 and 2290.
  • Alcohol, Tobacco and Firearms tax returns include Form 5300.26 and Form 5000.24.

How Does an LLC get an EIN?

To apply for an EIN, your LLC must complete an Application for Employer Identification Number (Form SS-4) and submit it to the IRS. There are three ways to apply:

Apply Online

The online EIN application is the easiest and fastest method because the IRS immediately reviews the information on Form SS-4 . If the IRS approves the application, it issues the EIN in minutes. Any LLC with a principal place of business in the United States can use the online application process as long as the member, officer, or manager applying on the LLC's behalf has a valid Social Security number.

Apply by Fax

You can complete a paper copy of the SS-4 and fax it to the correct number. If you provide a return fax number for your business, the IRS can confirm your information and issue an EIN by return fax within four business days.

Apply by Mail

By far the slowest method is to fill out and mail a paper copy of the SS-4 to the correct IRS address. The IRS confirms your information and issues an EIN within four weeks.

An online legal services provider can help you determine whether your LLC needs an EIN and, if so, help you apply for one.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.