FEIN stands for Federal Employer Identification Number, which is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. It is also known as a Federal Tax Identification Number or a Taxpayer Identification Number (TIN) when used for identification rather than employment tax reporting. The FEIN is used for tax administration and must not be used for any other purpose.

A FEIN has nine digits displayed as XX-XXXXXXX. It is usually written in form 00-0000000, whereas a Social Security Number (SSN) is usually written in the form 000-00-0000 in order to differentiate between the two. A FEIN is required for businesses that have employees and/or are incorporated. If a business is a sole proprietorship and does not have employees, the IRS will use the business owner’s SSN as a tax ID.

A FEIN is necessary for tax purposes, and it is used to identify and track business entities’ tax and financial activities. It is required to file tax returns, as well as to set up retirement accounts and health accounts to offer medical and dental benefits to employees, among other uses. Not every small business entity needs a FEIN, but many do. Businesses that typically do not need a FEIN include sole proprietorships that do not have employees.

To obtain a FEIN, businesses can apply online with a valid Taxpayer Identification Number (e.g., Social Security number) . The online system requires the applicant to complete the application in one session.