Does a holding company need an ein

A single-member LLC is only required to have an EIN if it has one or more employees or excise tax liabilities—however, you may still find it beneficial to obtain an EIN for your LLC.

The Employer Identification Number (EIN) is used by the Internal Revenue Service to identify a business entity. You may also see this number referred to as a federal tax identification number. While most businesses will need to have an EIN, some exceptions to this requirement exist, such as if your limited liability company (LLC) is a single-member LLC.

Can You Have an LLC Without an EIN?

All multi-member LLCs require an EIN, regardless of whether they are taxed as a partnership or have elected to be taxed as a corporation.

However, the situation for single-member LLCs is a little different. Unless a single-member LLC has elected to be taxed as a corporation, the IRS treats it as a disregarded entity. This means the LLC's income is treated as the owner's income for federal income tax purposes.

A single-member LLC that's treated as a disregarded entity is not required to obtain an EIN unless it has:

• One or more employees
• Excise tax liabilities

Additionally, if you make any changes that result in your LLC not being classified as a disregarded entity, you will need to apply for an EIN. For example, if you add a member to your LLC so it's no longer a single-member LLC, you will need to get an EIN.

What Is My LLC's Tax ID Number?

An LLC that's treated as a disregarded entity generally will not use its own EIN for any reporting or filings that are required for income tax purposes. Instead, the LLC must use either the owner's Social Security number (SSN) or the owner's EIN. This is the case even if you have obtained an EIN for your LLC.

However, for certain excise tax or employment tax filings, the LLC will be required to use its own EIN. For those filings, then, you would need to provide the LLC's EIN, and not the SSN or the EIN of the LLC's owner.

Should I Get an EIN for My LLC?

Even if you're not required to obtain an EIN for your LLC, your LLC might benefit from having one. For example, most banks require LLCs to provide an EIN in order to open a bank account. You can apply for an EIN even though you're not required by the IRS to have one.

How Do I Obtain an EIN for My LLC?

Applying for an EIN is an easy process, and no fees are involved. You have three options:

1. Online application: You can submit an online application for an EIN directly through the IRS website. This is the quickest way to obtain an EIN, as it will be issued to you immediately after your information has been validated at the end of your online session.
2. Application by fax: You can apply for an EIN via fax, by sending Form SS-4 (PDF) to the appropriate fax number. According to the IRS, once a determination has been made that your LLC needs an EIN, your new EIN will be faxed to you within four business days.
3. Application by mail: You can also mail in a completed Form SS-4. Once a determination has been made that your LLC needs an EIN, your new EIN will be mailed to you.

A single-member LLC is only required to obtain an EIN if it has one or more employees or if it's subject to excise tax liabilities. However, you may still find it beneficial to have an EIN for your LLC. Whether you're required to get an EIN or you need one for a non-IRS-related reason, applying for an EIN for your LLC is an easy process.

An employer identification number, or EIN, is a nine-digit number similar to a Social Security number. It is assigned to a business entity by the IRS. Business entities that are required to file various tax returns use their EIN the same way an individual uses his or her Social Security number. The IRS uses the EIN like an account number to keep track of tax returns. If your business is a single-member limited liability company (LLC) and is required to file a separate tax return, then you will need an EIN.

IRS Entity Classification

The IRS allows LLCs to choose how they will be classified for tax purposes. LLCs with two or more owners can choose to be treated as a partnership or corporation for tax purposes. Single-member LLCs can choose to be treated either as a corporation or a "disregarded entity." A disregarded entity is treated like a sole proprietorship by the IRS.

Owners of single-member LLCs who wish to be treated as corporations for tax purposes must file either IRS Form 8832 and elect to be treated as a C corporation or IRS Form 2553 to elect classification as an S corporation. If you do not file Form 8832 or 2553 to elect to be treated as a corporation, the IRS will treat your LLC as a disregarded entity and you will be taxed as a sole proprietorship.

Note this discussion applies only to single-member LLCs owned by individuals, not other companies.

Sole Proprietorship Tax Treatment

By default, the IRS treats single-member LLCs as sole proprietorships. (That is, if you don't make an election, your single-member LLC will be treated as a sole proprietorship.)

As a sole proprietorship doing business through an LLC, you do not need a separate EIN number unless you have employees or are required to file excise tax returns. By default, owners of single-member LLCs report the business profits and losses from the LLC on their personal tax returns using their own Social Security number or tax identification number. Owners of single-member LLCs are not required to have separate EINs because they are not considered employees of the LLC by the IRS. However, if your single-member LLC has other employees you are required to obtain an EIN and file employment taxes.

Corporate Tax Treatment

Corporations are treated as separate entities apart from their owners for tax purposes. As separate entities, the IRS needs a way to keep track of corporations and their various tax returns. The EIN is the mechanism by which the IRS tracks the business activities of corporations. Regardless of whether you are an employee of your single-member LLC, if you have elected to be treated as either an S or C corporation, you will need to obtain an EIN.

Other Considerations

Outside of federal tax considerations, there are other reasons why you may need to obtain an EIN. First, most banks will require you to obtain an EIN if you wish to open a business account in the name of the LLC. Second, many companies with which you do business may require you to have an EIN in order to process payments. Finally, some states may require LLCs to report income on state tax returns using an EIN. It is important to consider these factors as well as the IRS requirements when determining whether you need an EIN for your single-member LLC.

How do I get an EIN for a holding company?

Do holding companies file tax returns?

What is the difference between an LLC and a holding company?

What business does not need an EIN?