?What is the Employer Identification Number (EIN)?
The EIN is a nine digit number in the following format XX-XXXXXXX used for business identification purposes. The Employer Identification Number (EIN) is also known as a Federal Tax Identification Number and is used to identify a business entity.
The number is assigned to both US-based and foreign entities in order to identify them for tax matters, for statistical and administration purposes. The EIN is also required to hire employees, open bank accounts, issue W-2 forms, pay taxes, receive US source income and interact with other businesses, SSA and the tax administration. Similar to the SSN, the EIN is assigned and remains unchanged during the lifetime of the business entity. Only the IRS has the permission to assign EINs to both foreign and US-based companies.
?Why and when is EIN required?
An EIN is needed if any of the following circumstances apply to you:
In accordance to the above, almost any company, foreign or US based, qualifies to obtain an employer identification number.
?What documents are needed to complete the application?
In order to process the EIN application we need 4 documents:
1. A completed registration form
2. Signed Third Party Authorization form
3. Signed SS-4 “Application for EIN”
4. Company charter copy or picture ID copy and document showing current address (for individuals who are sole proprietors).
?Who should sign the application form SS-4?
?Should I have a SSN or ITIN to obtain an EIN?
No. If you are a non-resident alien, you do not need an ITIN or SSN to qualify for a business number, no matter what your entity type is. However if you have previously been assigned an ITIN or SSN you must disclose it on the application form. US citizens, long term residents and nationals must disclose their SSN on the EIN submission forms.
?How long does it take to obtain an EIN?
- For Electronic Filing – The EIN is disclosed immediately after payment is confirmed and the online application is filed. Electronic applications are accepted only for individuals holding a valid SSN or ITIN.
- For Paper filing – within 48 business hours after the payment from client is confirmed. NOTE: The 48 hours apply to regular IRS business hours. If a customer pays on Friday morning, the EIN will probably be issued on Monday afternoon.
?When can the EIN can be used?
For the majority of services it is available to use immediately when obtained, however it takes about 2-6 (US and abroad) weeks for the paper EIN notice to be issued. The notice is sent to the taxpayer directly to the company address listed on the application form. The notice is the official verification of the EIN and must be kept securely. Copies of it should be sent for verification when required.
?Can taxback.com file on behalf of an entity?
Yes. Both methods listed above allow an EIN application to filed and the EIN assigned to be received by a third party through the “Third Party Designee” section of the application form.
?I am a non-resident alien; can I work with the EIN?
No. The EIN is a business number and is not valid for employment purposes. Employees should obtain a valid SSN from the Social Security Administration to legally work. However, self-employed individuals may perform certain services under the EIN if they are otherwise authorized to work in the US.
?Why do you need a Company Charter?
The company charter or similar registration document must be released for company identity verification purposes. The individual signing the application forms must be listed on the charter as an owner, director, partner, trustee, etc depending on the type of the entity. The only exception is in case any of the latter has authorised in writing a company solicitor to perform actions on his/her behalf. In this case, Taxback.com needs a copy of the authorisation too.
?Why do you need a passport / ID copy?
For security and identify verification purposes we need a passport or ID copy if you fall in any of the categories below:
?Who are the sole-proprietors?
Sole-proprietors or self-employed individuals are usually individuals in certain special occupations. Most common examples are: architects, designers, photographers, accountants, researchers, musicians, singers, artists, writers, door-to-door sales agents, real estate brokers, florists, coiffeurs, stylists, plumbers, technicians, movers, make-up artists, masseurs, construction workers, sub-contractors, delivery workers, chiropractors, lawyers, public notary, etc. The list above is not a complete one, as legislation may vary between counties.
?What is a 'Certificate of Incumbency' and when you need it?
A 'Certificate of Incumbency' or similar documents are required for all entities, except Corporations trading on a registered stock exchange or sole-proprietors, to show that you are the actual owner of the company in question. Often the company owners are also stated in the company formation or organisation documents or in an appendix to them.
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