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Does a single-member LLC need an EIN? When the IRS requires one

Not always. The IRS says a single-member LLC that is a disregarded entity, with no employees and no excise tax liability, does not need an EIN and reports under its owner's SSN or EIN. It needs its own EIN once it has employees, owes certain excise taxes, or elects to be taxed as a corporation.

Last checked against the official sources listed on this page.

The default: the owner's number

For federal income tax, the IRS treats a single-member LLC as disregarded, meaning not separate from its owner, unless it files Form 8832 to elect corporation treatment. The LLC files no income tax return of its own. When the owner is an individual, the LLC's income and expenses go on Schedule C, E, or F of the owner's Form 1040 (Publication 3402).

Income tax reporting runs on the owner's taxpayer identification number. The IRS says a disregarded single-member LLC generally must use the owner's SSN or EIN for all information returns and reporting related to income tax. When a client asks that LLC for a Form W-9, the form carries the owner's SSN or EIN, and the IRS says it should leave the LLC's own EIN off.

The same IRS page says a disregarded single-member LLC with no employees and no excise tax liability does not need an EIN. It uses the name and taxpayer identification number of its owner for federal tax purposes.

When the LLC needs its own EIN

The disregard covers income tax only. For employment tax and certain excise taxes the IRS treats a single-member LLC as a separate entity, and Publication 3402 says it is considered a corporation for those purposes. For wages paid after January 1, 2009, the LLC must use its own name and EIN to report and pay employment taxes.

Excise taxes follow the same rule. The LLC uses its own name and EIN to register for excise tax activities on Form 637, to pay and report excise taxes on Forms 720, 730, 2290, and 11-C, and to claim refunds, credits, and payments on Form 8849. The IRS says an LLC will need an EIN if it has any employees or will be required to file any of those excise tax forms, and that most new single-member LLCs classified as disregarded entities will need to obtain one.

Publication 3402 works through a disregarded LLC with three employees. The LLC files the employment tax returns, makes the deposits, and furnishes Forms W-2 under its own name and EIN. The owner is not an employee of the LLC for employment tax purposes; she pays self-employment tax on her net earnings and still reports the business on Schedule C.

Two other cases call for the LLC's own number. A U.S. disregarded entity wholly owned by a foreign person files information returns on Form 5472 using its own name and EIN (Form SS-4 instructions). An LLC that elects to be taxed as a corporation, on Form 8832, or as an S corporation, on Form 2553, applies as a corporation and names the return it will file, Form 1120 or Form 1120-S.

Getting an EIN for a bank account or a state

An LLC that needs no EIN for federal tax can still get one. The IRS single-member LLC page says that if the LLC needs an EIN to open a bank account, or if state tax law requires it to have a federal EIN, it can apply for and obtain one. The IRS EIN page says the same about banking and state tax purposes in general.

An EIN obtained for those reasons does not take over income tax reporting. Publication 3402 says a disregarded single-member LLC uses the owner's SSN or EIN for all income tax purposes, so the owner's number stays on income tax filings and on any Form W-9 the LLC gives a client.

The IRS EIN page lists a limited liability company among the entities that need an EIN. The single-member LLC page and Publication 3402 are the IRS pages that deal with the one-owner case, and both carve out the disregarded LLC with no employees and no excise tax liability.

Filling in Form SS-4 for a single-member LLC

The IRS issues EINs for free and says to register the LLC with the state before applying. Lines 8a to 8c of Form SS-4 collect LLC information, and when the answer on line 8a is yes, line 8b takes the number of members. Spouses who own an LLC as community property in a community property state, and choose to treat it as a disregarded entity, enter 1 on line 8b.

Line 9a records the type of entity, and the SS-4 instructions give a different entry for each reason a single-member LLC applies. A disregarded LLC getting an EIN for employment and excise taxes, or for a non-federal purpose such as a state requirement, checks Other and writes Disregarded entity. A foreign-owned U.S. disregarded entity that needs the EIN to file Form 5472 checks Other and writes Foreign-owned U.S. disregarded entity-Form 5472. An LLC getting the EIN to file Form 8832 or Form 2553 checks Corporation and writes Single-member and the return it will file, Form 1120 or Form 1120-S.

An applicant can get only one EIN per day, whether the application goes in online, by phone, by mail, or by fax.

When a single-member LLC needs a new EIN

The IRS says an entity generally needs a new EIN when its ownership or structure changes, and does not need one to change its business name, address, or responsible party. For an LLC, the IRS lists two cases that call for a new EIN: terminating an existing LLC and forming a new corporation or partnership, and owning a single-member LLC that has to file excise or employment taxes.

An LLC keeps its EIN when it changes its name or location, changes its tax election to a corporation or an S corporation, or reports income tax as a branch or division of another entity with no employees and no excise tax. An owner who uses a sole proprietor EIN for a single-member LLC can keep using it while the LLC is not taxed as a corporation or an S corporation and has no employees or excise tax.

Adding a member changes the classification. Under the default rules, a disregarded single-member LLC that acquires an additional member becomes a partnership unless a corporation election is in effect (Publication 3402). The SS-4 instructions cover that LLC when it requests an EIN after the change: it checks Partnership on line 9a.

On vermilionvitez.com: What documents a bank asks for when an LLC opens a business account

Official sources

FAQ

Can a single-member LLC use the owner's Social Security number?

For income tax, yes, while it is a disregarded entity. The IRS says a disregarded single-member LLC generally uses the owner's SSN or EIN for all information returns and income tax reporting. It needs its own EIN for employment taxes and certain excise taxes.

Does a single-member LLC with employees need its own EIN?

Yes. For wages paid after January 1, 2009, the IRS requires a single-member LLC to report and pay employment taxes under its own name and EIN, even when it is disregarded for income tax. The owner is generally not an employee of the LLC and pays self-employment tax.

Can a single-member LLC get an EIN just to open a bank account?

Yes. The IRS says a single-member LLC can apply for and obtain an EIN when it needs one to open a bank account or when state tax law requires one. A disregarded LLC still reports income tax under the owner's SSN or EIN.

Which number goes on a Form W-9 for a single-member LLC?

When the LLC is a disregarded entity owned by an individual, the IRS says the W-9 gives the owner's SSN or EIN. The IRS single-member LLC page says the LLC's own EIN does not go on that form.

Does electing S corporation status require a new EIN?

No. The IRS lists changing an LLC's tax election to a corporation or an S corporation among the changes that do not need a new EIN. An LLC with no EIN yet that applies in order to file Form 2553 checks Corporation on line 9a of Form SS-4.

This page is general information about how a filing works, taken from the official sources listed above. It is not legal, tax, or financial advice, and it does not recommend any business structure. Confirm current forms, fees, and deadlines on the official source before you file.