Do Sole Proprietorships Have an EIN?

The federal government classifies a business run by an individual as an unincorporated enterprise as a sole proprietorship. More than 23 million sole proprietors filed tax returns with the Internal Revenue Service as of 2007, according to a 2011 IRS report. While the IRS requires many businesses to have an Employer Identification Number (EIN), sole proprietors do not need an EIN unless they fit certain characteristics defined by the federal agency.

Purpose of an EIN

The federal government uses the EIN, a nine-digit number, to identify business entities when they file tax forms. The number assigned to a business can identify where the business is located. An EIN is also referred to as a Federal Tax Identification Number

Obtaining an EIN

Sole proprietorships can apply for an EIN by filling out Form SS-4 and submitting it via mail or to an IRS regional office. The agency also provides online filing at The Web-based interview-style application allows a business to obtain an EIN immediately after submission. You are limited to requesting five EINs per day. There is no charge to apply for an EIN.

Sole Proprietorship EIN Requirements

The IRS provides a simple questionnaire on its website to help sole proprietors determine if they need to apply for an EIN. Businesses who have employees must file for an EIN. If a business withholds taxes on income paid to non-resident aliens for anything other than wages, it must also file for an EIN. Other conditions that require filing for an EIN include having a retirement plan and/or filing tax returns for excise, tobacco, alcohol or firearms.


As soon as you receive your EIN from the IRS, you can use it for many purposes. Some states require businesses to have an EIN to pay for state taxes. In addition to using the number to file federal taxes, sole proprietors can also use the EIN as an identifying number when applying for state and local business licenses, for opening a bank account and other financial purposes. You are not required to apply for a new EIN if you change the name of your business, but you must contact the IRS via mail about the change at the address where you file your federal taxes.