Is EIN the Same As a Federal Tax ID?

by Christopher Carter - Updated September 26, 2017

An employer identification number (EIN) and a federal tax ID number are the same thing. The Internal Revenue Service is the government agency responsible for issuing an EIN to companies.

Significance

An EIN number is a 9-digit number designed to identify a company to the IRS in the same way a social security number is used to identify a person. Companies are required to present an EIN to establish a business bank account.

Exception

Sole proprietorships are not required to get a federal tax ID number. A sole proprietor may use his social security number as opposed to a federal tax ID number. However, it is probably a good idea for a sole proprietor to apply for an EIN because using a social security number for business purposes may expose the business owner to fraud, as explained by the Financial Web website.

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Nonprofits

All nonprofits, including charities, must have an EIN. Each branch of a charity carries its own individual EIN.

Form SS-4

Form SS-4 must be completed and filed with the IRS in order for a company to get an EIN. The IRS allows companies to apply on the IRS website, by telephone, fax or by mail. The IRS does not charge a fee to issue an EIN.

About the Author

Christopher Carter loves writing business, health and sports articles. He enjoys finding ways to communicate important information in a meaningful way to others. Carter earned his Bachelor of Science in accounting from Eastern Illinois University.

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