FEIN

What is FEIN?

An FEIN is required by any business entity with employees, as well as any entity that pays employment taxes as well as excise taxes or alcohol, tobacco, and firearms taxes. According to the IRS’s taxpayer identification numbers site, the following types of entities are also required to hold an FEIN:

• Partnerships
• Limited liability companies (LLCs)
• Corporations
• Tax-exempt organizations
• Estates
• Trusts
• Retirement plans or individual retirement accounts (IRAs)
• Real estate mortgage investment conduits
• Farmers’ cooperatives

Similar to how a Social Security number is used by individual taxpayers, FEINs are a critical part of the Internal Revenue Service’s administrative process. These federal tax ID numbers are used by the IRS to associate businesses to their employees for both state and federal taxes along with a host of other, less common uses for financial accounting purposes related to tax returns for estates, trusts, and retirement accounts.

In some cases, an FEIN may also be necessary to open a business bank account or to secure a business license in certain states.

For more information on employer ID numbers, check out LegalZoom’s complete guide to FEINs.

Frequently asked questions

Is a FEIN different from an EIN?

FEIN and EIN—short for “employer identification number”—are generally used interchangeably, but there are certain cases where an EIN refers to a state tax identification number instead. It’s good practice to use the term FEIN where applicable to lower the chances for misinterpretation.

Who issues FEINs?

FEINs are issued by the IRS, usually at the time that a new business registers their entity with the state. It’s advisable to apply for an FEIN as soon as you register your business to ensure tax compliance from day one.

How long does it take to get an FEIN?

The registration process for an FEIN is very straightforward and takes only a few minutes to complete, with an ID number usually issued the same day the application is completed. It can be done directly through the IRS employer identification number online system or through an online service such as LegalZoom’s EIN registration service.

Does my business need an FEIN?

Not all businesses use FEINs to pay taxes. If your business structure is a sole proprietorship or a single-member LLC, for instance, you can choose to use your own Social Security number or a taxpayer ID number (TIN) to file your taxes.