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.
Banks often require an EIN to open a business bank account. It also separates your business and personal finances, as bankers, creditors, and the IRS will identify your business by its EIN rather than by your personal Social Security number.
An EIN helps establish business credit, boosting 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 Washington?
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:
All businesses also need to register with the Department of Revenue for a general business license, which signs you up for the business and occupation tax, public utility tax, and sales tax, if applicable to your business.
Your local government may also require tax registrations.
What are the costs associated with obtaining an EIN for my Washington LLC?
There is no charge for getting an EIN from the IRS. Whether you’re in Washington or any other state, the process is free of charge.
How long after application will I receive my EIN in Washington?
For online applications, you generally receive your EIN instantly after a successful submission. Fax applications might take about four business days. If you send your application through mail, it might take up to 4-5 weeks.
Can I use my personal Social Security Number (SSN) in place of an EIN for my Washington LLC?
While sole proprietors often use their SSN for business matters, it’s advisable for an LLC to obtain its own EIN to ensure privacy and meet various operational requirements.
Once I have an EIN for my Washington LLC, is there a need for renewal or reapplication?
No, an EIN is permanent for a specific business entity. However, if there are substantial changes in the structure or ownership of the LLC, a new EIN might be necessary.
Is it possible for foreign nationals to get an EIN for an LLC based in Washington?
Yes, non-U.S. residents can acquire an EIN for their Washington-based LLC. If they don’t have an SSN or ITIN, the application process might be slightly different, often involving fax or mail.
Are there any specific EIN-related guidelines for Washington?
The EIN application is a federal procedure and remains consistent across states. Once you have the EIN, you might need to be aware of any state-specific regulations or requirements for businesses in Washington.