How Many EIN Numbers Can I Have?

An Employer Identification Number (EIN) is a unique identifier assigned by the IRS to businesses for tax purposes. It helps to track their activities and ensure compliance with federal regulations. While a single EIN typically suffices for most businesses, circumstances may require more than one. So, how many EIN can I have?

In this article, we will explore the purpose of EINs, the situations where multiple EINs may be necessary, and the implications of having more than one. Whether starting a new business or managing multiple entities, understanding how EINs work is crucial for smooth operations and compliance.

What is an EIN?

An Employer Identification Number (EIN), or Federal Tax Identification Number, is a unique nine-digit identifier issued by the IRS to businesses in the United States. It serves as a vital component of business operations, acting as the equivalent of a Social Security Number for organizations.

Here’s how EINs are used:

• Tax reporting: EINs are required for filing federal tax returns, including income, payroll, and excise taxes. They ensure accurate identification of a business in all communications with the IRS, streamlining tax compliance and record-keeping processes.
• Hiring employees: Businesses use EINs to manage payroll and report employee wages to the IRS. They are also necessary for filing employment tax forms, including Social Security and Medicare taxes, which are critical for complying with labor laws.
• Business identification: An EIN serves as a unique identifier for businesses in legal and financial transactions. It is used in contracts, opening business bank accounts, and establishing credit, reinforcing the company’s credibility and legitimacy.

For businesses with complex structures or multiple entities, a common query is, how many EIN can I have? The number depends on how many separate business entities you operate, as each must have its own EIN. However, a single entity should only use one EIN to avoid administrative issues.

Who is required to obtain an EIN?

An EIN is a critical requirement for various individuals and entities engaging in business activities. The IRS mandates EIN registration for:

• Businesses hiring employees: Any business entity with employees must obtain an EIN for tax reporting purposes.
• Partnerships, corporations, and non-profits: Certain types of entities must have an EIN to file business tax returns and comply with federal regulations.
• Filing specific tax returns: EINs are necessary for filing employment, excise, and certain other tax returns.
• Trusts, estates, and organizations with Keogh plans: These specialized entities must also have an EIN.
• Withholding taxes for non-resident aliens: Businesses withholding income tax other than wages for non-resident aliens must register for an EIN.

Whether you’re forming a sole proprietorship, Limited Liability Companies (LLCs), or Non-Profit Organizations (NPOs), an EIN ensures compliance with tax regulations and simplifies interactions with banks and government entities.

Can a business or individual have multiple EINs?

You might be asking, “How many EIN can I have?”, “Can I have multiple EIN numbers?”. The short answer is yes, but only under specific circumstances. There’s no limit to the number of EINs a person or business can obtain. However, a single business entity can only have one EIN assigned to it, regardless of the number of activities it engages in.

These are specific scenarios where having multiple EINs is required, ensuring proper identification and compliance with IRS regulations:

• Owning multiple entities: If you operate several distinct LLCs, corporations, or partnerships, each must have its own EIN to maintain compliance.
• Dividing a business into separate entities: When a single company is split into multiple, independent entities, each newly created entity will need its own EIN.
• Series LLCs: This depends on how the Series LLC is structured:
  • If each series within the LLC operates independently, with separate bank accounts and tax filings, a unique EIN is required for each series.
  • If the Series LLC is treated as a single entity for tax purposes, only one EIN is necessary.

Some people might ask, “Can I use the same EIN for two businesses?” It is not possible to use the same EIN for different businesses, even if they share the same owner. Sharing an EIN between unrelated businesses could lead to significant compliance issues with the IRS.

A common misconception is that every new employee hired or every new business activity undertaken requires a new EIN. This is not true. If these changes occur within the same entity, your existing EIN remains valid. Similarly, a business operating multiple “Doing Business As” (DBA) names does not need separate EINs for each DBA.

Certain changes, such as changing your legal structure (e.g., switching from a partnership to a corporation) or creating a new entity, require obtaining a new EIN. For instance, if you set up a new entity in Delaware, you’ll need to apply for an EIN number in Delaware. Knowing when a new EIN is needed and when it’s not can help simplify your business processes and ensure you stay compliant with tax regulations.

How to apply for multiple EINs?

Obtaining multiple EINs is a straightforward process when approached systematically. Follow the steps below to ensure each application is completed accurately and efficiently.

Step 1: Prepare the required information

Before starting the application, gather the necessary details to complete Form SS-4. Having these on hand will streamline the process:

• Business name and address: The legal name and mailing address of the business entity.
• Type of entity: Identify the business structure (e.g., LLC, corporation, partnership).
• Reason for applying: State whether the application is for a new business, compliance with IRS withholding requirements, or a change in business structure.
• Business start date and tax year: Provide the date your business began operations and the accounting year it follows.
• Expected employment: Estimate the number of employees you will hire within the next 12 months.
• Wage payment start date: Specify when you plan to begin paying wages.
• Principal activity: Describe the primary industry or business activity.
• Third-party details (if applicable): If a third party is handling the application, include their information.

Step 2: Apply using Form SS-4

The IRS Form SS-4, “Application for Employer Identification Number,” is the official document required for obtaining an EIN. Once the form is completed, you can submit it through one of the following methods:

• Online application: The fastest and most convenient option. Submit your completed form via the IRS EIN online application system and receive your EIN immediately upon verification.
• By mail: Send the completed Form SS-4 to this address:
  • Internal Revenue Service
  • Attn: EIN Operation
  • Cincinnati, OH 45999
  • Processing time is approximately 4–5 weeks.
• By fax: Fax the completed form to (855) 641-6935. With a return fax number included, the IRS estimates a processing time of one week.

Step 3: Repeat the process for each EIN

Since the IRS assigns each EIN to a unique legal entity or purpose, a separate Form SS-4 must be completed for every EIN. Note that the IRS limits individuals to one EIN application per day.

Legal considerations for applying for multiple EINs

Applying for multiple Employer Identification Numbers (EINs) requires careful attention to legal and regulatory factors to ensure compliance with IRS guidelines.

• IRS scrutiny: Submitting several EIN applications within a short period can attract scrutiny from the IRS. To avoid potential delays or rejections, be prepared to justify the need for each EIN. Maintaining transparency about the purpose of each application is essential.
• Unnecessary applications: Acquiring EINs when not required may complicate tax filings and bookkeeping. For instance, if a single entity operates multiple DBAs (Doing Business As names), additional EINs are unnecessary. Consult a tax professional to determine whether multiple EINs are appropriate for your business structure.

• Centralized management: Managing several EINs can become overwhelming, particularly during tax season. Using accounting software or online tools to track EIN records, deadlines, and related tax obligations can help streamline operations and reduce administrative errors.

So, what happens if you have two EIN numbers for the same business? Occasionally, a business may inadvertently acquire two EINs due to an error or misunderstanding. If this happens, contact the IRS immediately to consolidate records. Resolving duplicate EINs ensures accurate filings and prevents potential legal complications.

Conclusion

Understanding the rules and implications of managing multiple EINs is essential for managing your business effectively and staying compliant with IRS regulations. While the IRS imposes no limit on “how many EIN can I have”, each number must correspond to a unique legal entity or purpose.

If you’re unsure when or why to apply for multiple EINs, consult BBCIncorp to guide you through the process. By staying informed and organized, you can ensure smooth operations and avoid potential complications with the IRS, setting a solid foundation for your business’s growth and success.

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