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 New York?
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 New York
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 New York Taxes
You also may need to register for business taxes in New York. If you have employees, you’ll need to register to withhold state income and unemployment taxes on the Business Express website.
You can also register for sales tax on the same site if you sell taxable goods or services.
Your local government may also require certain tax registrations.
Even if your LLC does not need to obtain an EIN in New York, 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.
Are there any fees associated with obtaining an EIN for my New York LLC?
No, applying directly through the IRS for an EIN is free of charge.
Once applied, how soon can I expect to receive my EIN in New York?
For online applications, the EIN is often provided immediately upon completion. Fax applications usually take about four business days, whereas mail applications can take 4-5 weeks.
Can I just use my personal SSN for my LLC's activities instead of an EIN in New York?
While sole proprietors sometimes operate using their SSN, it’s generally recommended for LLCs to obtain and use a separate EIN. This ensures enhanced privacy and clearer business finances.
Do I need to renew the EIN for my New York LLC periodically?
No, once assigned, an EIN is permanent and remains with your New York LLC unless there are significant changes in the business’s structure.
Is it possible for foreign nationals to obtain an EIN for an LLC in New York?
Yes, non-U.S. citizens can secure an EIN for their New York-based LLC. Even without an SSN or ITIN, foreign nationals can typically apply via fax or mail.
Are there any unique regulations or steps for obtaining an EIN in New York?
The process of getting an EIN is standardized at a federal level by the IRS. However, once you’ve obtained your EIN, it’s crucial to be aware of any New York-specific business regulations or tax requirements.