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 Vermont?
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 Vermont
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 Vermont Taxes
You also may need to register for business taxes in Vermont.
If you have employees, you’ll need to register for a withholding tax account to withhold and pay state income taxes with the Department of Taxation. In addition, you’ll need a separate account with the Department of Taxation for sales tax if you sell taxable goods or services.
You’ll also need to register for unemployment taxes with the Department of Labor if you have employees.
Your local government may also require certain tax registrations.
Even if your LLC does not need to obtain an EIN in Vermont, 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.
How much does it cost to obtain an EIN for my Vermont LLC?
Applying directly through the IRS does not incur a fee for obtaining an EIN. However, be cautious of third-party services that may charge for this service.
How soon will I receive my EIN after completing the online application in Vermont?
The online application process is typically instantaneous. Upon successful completion of the application, your EIN will be provided immediately.
I previously obtained an EIN for another business type; can I use the same number for my Vermont LLC?
No. If you form a new entity type or transition, for example, from a sole proprietorship to an LLC, you’ll need to acquire a new EIN.
Instead of an EIN, can I use my personal Social Security Number (SSN) for my Vermont LLC?
It is not recommended. Acquiring an EIN keeps a distinct separation between personal and business finances, which is essential for both tax and liability reasons.
Is there an expiration or need to renew my EIN periodically in Vermont?
No. Once assigned, your EIN does not expire for the lifespan of your Vermont LLC. Nevertheless, specific business structure changes may necessitate obtaining a new EIN.
Should my LLC be officially registered in Vermont before I apply for an EIN?
Yes, before applying for an EIN, your LLC should be legally recognized and formed in the state of Vermont.