Frequently Asked Questions

8. Do I need an Employer Identification Number (EIN) or Federal Tax ID number? If so, how do I obtain it?

The EIN is essentially the social security number for your business and is the same as a Federal Tax ID number. A EIN is a nine-digit number assigned to sole proprietors, partnerships, corporations, estates, trusts, and other entities for filing and reporting purposes. Every business with employees has to have an EIN as do corporations and businesses that need to collect and remit sales tax. However, even businesses with no employees may choose to have a Federal Tax ID number/EIN. For example, a sole proprietor might need to have an EIN to open a business account at a bank or in order to work with venders. Otherwise, sole proprietors can use their social security number for tax reporting purposes.

Contact the IRS for additional information or to obtain a Federal Tax ID number.

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The Arkansas Small Business and Technology Development Center is funded in part through a cooperative agreement with the U.S. Small Business Administration through a partnership with the University of Arkansas at Little Rock College of Business and other institutions of higher education. All opinions, conclusions, or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. UALR is committed to the policy of providing equal opportunity for all persons and does not discriminate in employment, admissions, programs, or any other educational functions and services on the basis of sex, age, disability, race, and national origin, color or religion.