If your LLC has more than one member or if you are going to hire employees, you’ll need an EIN. But these aren’t the only factors. The IRS offers a test to determine if you need an EIN:
Do you have employees?
Do you operate your business as a corporation or a partnership?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco, and Firearms?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
Are you involved with any of the following types of organizations?
Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Real estate mortgage investment conduits
If you answer yes to these questions, your business needs an EIN.
Benefits of Having an EIN
There are several reasons to get an EIN, even if you’re not required to have one. For example, opening a business bank account is often required, which creates separation between your business and personal finances. In addition, creditors and the IRS will identify your business by your EIN instead of your social security number.
Also, it helps establish business credit, which will boost your access to financing. And, if you do end up hiring employees in the future, you’ll already have your EIN and be ready to go.
What Do I Need to Get an EIN in Arkansas?
According to the IRS:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner, or trustor. This individual or entity, which the IRS will call the ‘responsible party,’ controls, manages or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.
When you fill out the application, you’ll need the following:
Your local government may also require certain tax registrations.
What's the cost of obtaining an EIN for my Arkansas LLC?
Acquiring an EIN from the IRS is free. You won’t incur any charges when applying for an EIN for your LLC in Arkansas.
After applying, how long will it take to get my EIN in Arkansas?
If you apply online, the EIN is typically issued immediately upon completion. Applications through fax might take up to four business days, while mailed-in forms can require 4-5 weeks.
Can I just use my personal Social Security Number (SSN) instead of obtaining an EIN for my LLC in Arkansas?
While some sole proprietors might opt to use their SSN, it’s recommended that an LLC obtains its own EIN for reasons like enhanced privacy and to meet various business requirements.
Once I've received an EIN, will I ever need to renew or reapply in Arkansas?
No, EINs are permanent for a specific business entity. However, substantial changes to the LLC’s structure or ownership might necessitate a new EIN.
Can foreign individuals obtain an EIN for an LLC established in Arkansas?
Yes, non-U.S. residents can secure an EIN for their Arkansas LLC. In cases where they don’t have an SSN or ITIN, they may need to apply via fax or mail.
Are there any Arkansas-specific requirements for EIN applications?
The process to secure an EIN is a federal one, so it’s consistent across states. Once you have your EIN, however, it’s important to check for any Arkansas-specific business requirements or regulations.