Purpose of an EIN

An Employer Identification Number (EIN) is essentially a Social Security Number for your business. EINs are used to distinguish your business financial data from your personal finances.

Who Needs an EIN?
These 9 digit numbers are utilized for tax purposes and are required for every business with one or more part-time or full-time employees. Additionally, if you pay any contractor or subcontractor for services valued at more than $600 per calendar year, you are also required to have an EIN. If you are registered as a limited liability company, corporation, partnership, or joint venture then you must have an EIN.

How does an EIN work?

EINs identify the business entity and are tagged to all employees as well. These numbers are utilized by employees when filing tax returns and relevant tax documents. The government tracks revenues, salaries and other financial data utilizing these numbers.

How do I obtain an EIN?

Your PEO can assist you in obtaining an EIN or you can apply for one online from the IRS. Online EINs are effective immediately. Additional application options include applying by fax or by mail. Regardless of your application method, it takes up to two weeks for the IRS to assign your EIN to their database.

One of the benefits of outsourcing your HR functions to a PEO provider is that they are capable of handling all of the tricky tax codes and payroll processing services. Contact us today to find out more about how a PEO can help you optimize your payroll and tax processes.