Understanding IRS Form SS-4: A Comprehensive Guide

IRS Form SS-4, officially called the Application for Employer Identification Number (EIN), is used by businesses and other entities to apply for an EIN – an important tax ID number used for identification and tax reporting purposes.

What is an EIN and Why Do You Need One?

An Employer Identification Number (EIN) is a unique nine-digit tax ID number assigned by the Internal Revenue Service (IRS) to business entities for identification and tax reporting purposes. It is used similarly to how an individual uses their Social Security Number. Some key facts about EINs:

• Used for identification rather than tax payment purposes
• Required for most business structures including corporations, partnerships, and multi-member LLCs
• Enables a business to open bank accounts, apply for licenses, hire employees, file tax returns
• Each legal entity needs its own EIN, you cannot use your SSN

You should apply for an EIN if you answer “Yes” to any of the following:

• Do you have employees or plan to hire employees?
• Are you structured as a corporation or partnership?
• Do you operate your business as a limited liability company (LLC) with multiple members?
• Do you file any special tax returns like excise, tobacco, alcohol, or firearms?
• Do you withhold taxes on payments made to non-resident aliens?
• Do you have a Keogh retirement plan or need to file Form 5500?

If so, you are generally required to obtain an EIN by filing Form SS-4 with the IRS. Some exceptions apply for single-member LLCs or sole proprietors without employees who may be able to use their Social Security Number instead. Now let’s go through step-by-step instructions for filling out this important form.

Step-by-Step Instructions for Filling Out IRS Form SS-4

Follow these key steps to properly complete IRS Form SS-4:

1. Determine Who the Responsible Party Is

The “responsible party” is an individual who has the authority to control, manage, or direct the entity and disposition of its funds and assets. For an LLC, corporation, or partnership this is generally an owner, officer, or partner identified in the formation documents. Trustees or executors can also serve as the responsible party. This person listed will need to sign Form SS-4. Accurately provide their name, SSN, address, and title.

2. Select the Appropriate Business Structure

Check the box that correctly identifies your business structure. Common options include:

• Corporation
• Partnership
• Limited liability company – If multi-member, check the LLC box. If single member, check the sole proprietorship box instead.
• Sole proprietorship
• Trust or estate
• Personal service corporation
• Church or church-controlled organization
• Other nonprofit organization
• Farmers’ cooperative
• REMIC (real estate mortgage investment conduit)
• State/local government
• Federal government/instrumentality

Carefully choose the appropriate designation for your business structure.

3. Provide the Reason You Are Applying for an EIN

Check the box that best describes why you are submitting Form SS-4 to request an EIN at this time. Reasons may include:

• Started a new business
• Hired or plan to hire employees
• Created a trust
• Incorporated a business
• Formed a partnership or LLC
• Created a pension plan
• Have a Keogh plan
• Changing business structure type
• Acquired an existing business

Be sure to select an accurate and relevant reason that explains why you need an EIN for your business or organization.

4. Enter Your Business Name, Address, and Start Date

Provide the full legal name of your business, LLC, corporation, trust, or other entity exactly as it appears in your formation document filed with the state. List the physical business address where operations take place along with the date your business officially started or the date you took over operations if acquiring an existing business.

5. Select an Accounting Period End Date

Specify the last day of your business’s accounting year or tax year-end date based on your chosen fiscal tax year. Most small businesses use a calendar year ending December 31st. However, a fiscal year with a different month-end date is also acceptable.

6. Estimate Your Highest Number of Employees

Review average staffing levels and seasonal fluctuations to select the box that most closely matches the highest number of employees you expect to have during the next 12 months. Check “0” if you have no intention of bringing on employees in the coming year. Having employees triggers additional tax filing and withholding requirements.

7. Enter Your Principal Business Activity Code

The IRS uses standard codes to categorize industries and business activities. Review the list of Principal Business Activity Codes in the instructions and select the one that most closely matches your primary business operations.

8. Provide All Owner/Partner/Member Information

List the full legal names, Social Security Numbers, titles, and ownership percentages of all individuals who have an ownership stake in your business. For LLCs, this includes all initial members. For partnerships, this requires identifying all partners. Corporations must list all officers and shareholders. Accurately reporting this information is crucial to link ownership to the assigned EIN.

9. Double Check All Information for Accuracy

Carefully review the completed Form SS-4 before signing to ensure all information is correct. Verify business name, address, structure, dates, and responsible party details. Correct any errors or typos before submitting to prevent potential delays or issues with EIN processing.

10. Sign and Date Form SS-4

The responsible party listed in Step 1 above must provide an original signature and date by hand on the printed Form SS-4 before submitting it. Unsigned or undated forms cannot be processed by the IRS to assign an EIN. Be sure to keep a copy of the completed, signed SS-4 for your records as well.

Key Information You’ll Need to Provide on Form SS-4

In addition to the step-by-step instructions above, make sure you have the following information prepared when sitting down to fill out Form SS-4:

• Your business’s legal name and “doing business as” trade name(s), if any
• Business ownership structure
• Physical location address
• Date business started or acquired
• Accounting period end date
• Responsible party’s name, SSN, title
• Number of expected employees
• Description of main business activities
• Names, SSNs, titles, and ownership % of all owners

Having this information available will enable you to fully complete all sections of Form SS-4 properly to get your EIN without delays or issues.

Common Mistakes to Avoid When Filling Out IRS Form SS-4

While Form SS-4 is relatively straightforward, many applicants make minor yet crucial mistakes that can hold up EIN assignments. Be sure to avoid these common errors others make on Form SS-4:

• Inaccurate or incomplete responsible party information
• Checking the wrong box to identify your business structure
• Failure to provide an acceptable reason for applying
• Entering an incorrect business start or acquisition date
• Estimating employee numbers too high or too low
• Listing the wrong main business activity code
• Errors in ownership percentages that don’t add to 100%
• Illegible signatures or missing signatures
• Outdated business addresses or contact information

Double-checking your Form SS-4 before signing and submitting can help identify any oversight errors and prevent return delays.

How Should You Submit the Completed IRS Form SS-4?

Once you’ve completed Form SS-4 fully and accurately, signed and dated it, and made a copy for your records, you need to send it to the IRS to officially apply for your business EIN. You have a few options to submit your SS-4 application form:

OnlineFor fastest processing, you can submit Form SS-4 electronically instead of on paper by answering questions on the IRS website to create an online application. You’ll need to provide much of the same information required on the paper form. Online SS-4 applications result in instant EIN assignments upon successful completion.

FaxFaxing in your signed and completed paper Form SS-4 is faster than mailing. The IRS provides designated fax numbers to send SS-4 applications to on the instructions. Processing via fax typically takes around 4 business days.

By MailYou can also mail in your paper Form SS-4 by sending it to the address listed in the instructions. This method takes the longest – up to 4 weeks for the IRS to receive, process, and mail you back your official EIN confirmation notice. I recommend applying online or by fax to get your EIN sooner unless you prefer keeping hard copy records of correspondence with the IRS