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Are there Different Types of EINs?

Jul 10, 2018 9:00:00 AM / by Courtney Pellegrini

 

EIN

 

After you’ve completed step 1 of starting a nonprofit (filing for incorporation), you’re ready to apply for an EIN number.

The EIN (Employer Identification Number) is a unique number that identifies your organization to the Internal Revenue Service. Every organization must have an employer identification number (EIN), even if you’re not planning on hiring employees any time soon. You’ll need this number for your in order to apply for tax-exemption, as well as for all your state and federal reports.

Getting an EIN number is free and easy; all you have to do is submit the IRS Form SS-4. You can apply for an EIN online, by mail, or by fax. You may also apply by telephone if your organization was formed outside the U.S. or U.S. territories.

Note: If your organization is a church or church-controlled organization, then check that box in line 9a. If not, check “other nonprofit organization” as the type of entity. You can then specify what type of organization you are (most of the time, “charitable” is sufficient.)

If you submit your Form SS-4 online, you’ll receive your EIN immediately. If you apply by mail, the IRS estimates that you’ll receive your EIN in four to five weeks.

Some other important things to remember:

  • The EIN is not your tax-exempt number. According to the IRS, “tax-exempt number” generally refers to a number assigned by a state agency that identifies organizations as exempt from state sales and use taxes. If you need additional information about this, contact your state revenue department.
  • Don’t apply for an EIN until your organization is legally formed. The IRS states that nearly all organizations are subject to automatic revocation of their tax-exempt status if they fail to file a required return or notice for three consecutive years. So, when you apply for an EIN, the IRS assumes that your state has already granted you incorporation.
  • The “name of applicant” isn’t your name; it’s the name of your new organization.

Another important thing to remember is that there are different types of EINS. When you form a business, it is classified under a certain "entity type", such as a sole proprietorship, partnership, corporation, or limited liability company (LLC). A nonprofit is technically a corporation; it's just a specific type (a nonprofit corporation). 

So, when you apply for an EIN for your nonprofit, make sure that you're applying for the correct type. You want a nonprofit EIN (not a sole proprietorship EIN, LLC EIN, etc.)

Once you've received your EIN, you’re ready to move onto step 2 of starting a nonprofit: applying for tax-exemption.

 

Topics: EIN, how to start a nonprofit, Incorporation