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. First, opening a business bank account is often required, and it adds a degree of separation between your business and personal finances. Bankers, creditors, and the IRS will identify your business by its EIN rather than your personal Social Security number.
Second, it helps establish business credit, boosting your access to financing. Third, if you 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 Delaware?
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:
Name, title, and Social Security number of managing member or owner
State in which your business is registered
Reason for applying
Main business activity
Closing month of your accounting year
Contact phone number and email
How to Apply for an EIN in Delaware
The application is Form SS-4, and you can submit it via the IRS website. Alternatively, you can print the form and fax or mail it. If you apply online, your EIN will be issued immediately.
There is no cost to obtain an EIN, which never expires.
Register for Delaware Taxes
You also may need to register for business taxes in Delaware.
If you have employees, you’ll need to register to withhold state income taxes on the One Stop business services website, which will also register you for gross receipts tax, similar to sales tax. Be sure to also register for unemployment taxes with the Department of Labor.
Your local government may also require certain tax registrations.
Even if your LLC does not need to obtain an EIN in Delaware, getting one is probably the best move for your business, its finances, and its future. Just be sure to fill out the forms correctly and keep your business on the path to success.
Is there a cost to obtain an EIN for my LLC in Delaware?
No, the IRS issues EINs for free. You can apply directly through the IRS without any charges.
After submitting my application, how long until I get my EIN in Delaware?
Online applications typically provide an EIN immediately upon completion. Fax applications can take around four business days, whereas mailed applications might take 4-5 weeks.
For single-member LLCs in Delaware, can I use my SSN in place of an EIN?
While it’s possible, it’s recommended for single-member LLCs to obtain an EIN for added privacy and to meet certain business needs.
Is it possible for non-residents or foreign entities to get an EIN for their Delaware LLC?
Yes, foreign individuals or entities can secure an EIN for their Delaware LLC. They can apply even without an SSN or ITIN, typically through mail or fax.
Does Delaware have unique requirements for LLCs after obtaining an EIN?
While the EIN is federally recognized, once obtained, you might have specific state-related obligations like registering for state taxes or ensuring you have the necessary business licenses in Delaware.
If my Delaware LLC undergoes significant changes, will I need a new EIN?
Some changes, like changes in ownership structure or the type of entity, may require a new EIN. It’s best to consult with a tax professional for clarity.