Have you ever felt so busy running around your business, and on top of that, figuring out stuff about the Employer Identification Number that you’re just so curious about:
“Do EIN numbers expire?” Have you had an EIN for your business, or have you been charged with managing a business? It’s likely that you have stumbled upon this term: EIN or Employer Identification Number.
But do these numbers expire? Can you use the same EIN for an infinitely long time, or will you eventually need a new number? Let’s break this down for you and explain everything you need to know about EINs.
What is an EIN?
An EIN is simply the Employer Identification Number given to a business by the IRS. In many ways, you could think of it like the social security number for a company, since the IRS uses it as an identifier for your business.
Why Do You Need an EIN?
Here are some of the reasons you may need an EIN:
- You have to hire Employees: If you have employees, you will need an EIN to report their wages as well as to withhold taxes.
- Open a Business Bank Account: Most banks require an EIN to open a business account.
- File Taxes: Most businesses file their federal and state taxes using an EIN.
- Apply for Licenses: Many local and state governments require an EIN to get licenses or permits for the business.
Plainly speaking, an EIN is needed by most businesses in the United States.
Do EIN Numbers Expire?
The Bottom Line: No
Good news—EIN numbers do not expire. Once the IRS assigns an EIN to your business, it is good for a lifetime. It never expires even if you retire from using the number or your business goes inactive.
Most people feel the EIN expires when your business closes or you stop using it. But according to the IRS, none of such reasons leads to deactivation of an EIN. Closing your business does not incur any effects on your EIN.
Tip: Keep A Safe Copy of Your EIN
Since EINs do not expire, you will probably want to store your number in a safe place. You might need to look up this number to reopen your business or address other tax matters later on.
What if I Close My Business?
If the business is to be closed, you don’t have to cancel the EIN. However, you do need to let the IRS know that your business is no longer in operation.
The IRS will put a closing status on the account but the EIN is not deactivated, so it can be available to use if you decide to reopen in the future.
How to Close a Business on the IRS
- File Final Tax Return: File any final tax returns, employment and income tax.
- Letter to IRS: Write to the IRS and notify them that your business will close. While writing to the IRS, do not forget to include the EIN, name of the business, and the reason you are closing your business.
Even after closing, keep tax records and EIN information handy when future requirements may arise.
When Do You Obtain a New EIN?
Although EIN numbers do not expire, situations do arise in which you must obtain a new EIN. These typically involve changing the structure or ownership of your business.
Common Reasons for Needing a New EIN
- Change in Business Structure: You are required to have a new EIN when you change your business form from a sole proprietorship into becoming a corporation or a partnership.
- Acquire Another Business: If your business acquires another business, you will likely need to obtain a new EIN.
- File for Bankruptcy: Businesses that file bankruptcy will likely need a new EIN depending upon the type of bankruptcy filed.
When Do You Not Need a New EIN
The following are cases where you do not need to obtain a new EIN:
- Business Name Change
- Change Location
- Add New Business or Expand Services
If your business changes and you are not sure whether you should apply for a new EIN, contact a tax professional or the IRS to confirm.
How to Get an EIN
It is easy and free to get a new EIN if needed. You can apply using the web through the IRS website.
Steps to Apply
- Visit the IRS Website: This is the fastest way to obtain your EIN. Online is how to apply.
- Application Form: Give basic information about your business, its structure, and its activities.
- You get your EIN: After submitting the online application for the number, you receive your EIN immediately.
Frequently Asked Questions on EIN
- Can I have an EIN for more than one business?
- No, a business must have its own EIN. In case you have more than one business, you are to have different EINs.
- What do I do if I lose my EIN?
- If you cannot locate your EIN, you can use any tax return the business has filed for to date or even call the IRS to obtain one.
- Is an EIN a Tax ID number?
- Yes, an EIN is a type of tax ID number, but while people have tax ID numbers like a Social Security Number, businesses use EINs.
- Can an EIN be assigned to another person?
- No, an EIN is assigned to a specific business that filed the application and cannot be transferred to another person or corporation.
Conclusion
EIN numbers expire? No, they don’t! Once the IRS gives you an EIN, then it is valid for the lifetime of your business. Your business may become active, inactive, or close down, but your EIN stays valid.
However, new EINs may be required if your business undergoes major changes, such as in structure or ownership. Knowing when to keep the EIN and when to get a new EIN will help you not to be behind the IRS standards, allowing your business to flow through more smoothly.
If you have further questions about EINs or even in the process of application, contact the IRS or a tax professional.
For further assistance with EIN applications, check out our EIN page. Also, you can check for more information on the IRS.
Want to know more about the process? Throw your questions in the comments below!