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.
It’s often required to open a business bank account. However, it creates separation between your business and personal finances because bankers, creditors, and the IRS will identify your business by its EIN rather than your personal 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 Maryland?
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 tax registrations.
Are there any costs to obtain an EIN for my LLC in Maryland?
No, applying for an EIN directly through the IRS is completely free.
Once I've applied, how long will it take to get my EIN in Maryland?
If you choose the online application method, you’ll usually receive your EIN immediately upon completion. Fax submissions can take up to four business days, and mailed applications might require 4-5 weeks.
Can I use my personal Social Security Number (SSN) instead of an EIN for my LLC's operations in Maryland?
While some sole proprietors may operate using their SSN, it’s advisable for LLCs to have a separate EIN. This provides clearer financial separation and satisfies many business requirements.
Once obtained, does an EIN in Maryland expire or need renewal?
No, once an EIN is assigned to your LLC, it remains with the business indefinitely, unless there are major structural changes.
Can non-U.S. residents acquire an EIN for their LLC in Maryland?
Yes, foreign individuals or entities can apply for an EIN for their Maryland LLC. Even if they don’t possess an SSN or ITIN, they can still apply, typically through mail or fax.
Are there specific EIN-related rules or nuances for Maryland that I should be aware of?
While the process of obtaining an EIN is federally standardized through the IRS, once you have your EIN, it’s essential to be familiar with any Maryland-specific business and tax regulations.