- June 11, 2021
- Posted by: Stratford Team
- Category: Business
The topic of Employer Identification Numbers is sure to arise as accounting professionals help their business clients get all of their tax to-dos in order. When does a business need an EIN?
In this article, I’ll discuss what the IRS says about the circumstances when business entities need an EIN (a.k.a., a “federal tax ID number”). I’ll also cover some of the situations when a business may need to change its EIN.
When a business must have an EIN
Let’s take a moment to review what the IRS says about EINs.
The IRS requires an individual or business to have an EIN when:
- It has employees.
- It operates as a corporation or partnership.It files any of the following tax returns: Employment; Excise; or Alcohol, Tobacco, and Firearms.
- It withholds taxes on income, other than wages, paid to a non-resident alien.
- It has a Keogh plan.
- There’s involvement with any of the following types of organizations:
- Trusts (some exceptions apply);
- Exempt Organization Business…