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 a 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 Michigan?
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 Michigan
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 Michigan Taxes
You also may need to register for business taxes in Michigan.
If you have employees, you’ll need to register to withhold state income tax with the Treasury Department. In addition, you can register for sales tax on the same site if you sell taxable goods or services.
Your local government may also require tax registrations.
Does the IRS charge for obtaining an EIN for my Michigan-based LLC?
No, there’s no fee to apply for an EIN directly through the IRS.
How long does it take to receive my EIN in Michigan after applying?
If you apply online, you typically receive your EIN instantly upon completing the application. Fax applications might take up to four business days, while mailed applications can take 4-5 weeks.
Can I use my own Social Security Number (SSN) in place of an EIN for my Michigan LLC?
While some sole proprietors might use their SSN for business activities, it’s advisable for LLCs to acquire an EIN. This helps separate personal and business finances and ensures compliance with many business requirements.
Does my Michigan LLC's EIN ever expire or need to be renewed?
No, once your LLC has been assigned an EIN, it remains with the entity indefinitely unless there are significant structural changes.
Can non-U.S. residents obtain an EIN for their LLC in Michigan?
Yes, foreign individuals can apply for an EIN for their Michigan-based LLC. This can be done even without an SSN or ITIN, typically through fax or mail.
Are there specific EIN-related rules or processes unique to Michigan?
The EIN application process is standardized federally through the IRS. However, once you have your EIN, be aware of any Michigan-specific business and tax regulations.