An organization must have an EIN before it can apply for tax-exempt 501(c)3 status from the IRS. This nine-digit number functions similarly to a social security number for individuals. Even non-profits that do not expect to have employees must get an EIN.
In addition to being necessary for obtaining a 501(c)3, EINs are needed for:
- Hiring employees
- Opening bank accounts
- Changing the type of organization
- Taking over an existing non-profit
- Creating a trust
In other words, it pays for a non-profit to get an EIN from the IRS early on in existence. Fortunately, Form SS-4, the Application for Employer Identification Number, is short, straightforward, and free. Before they can receive an EIN, new businesses (including new non-profit organizations) need to state their:
- Legal name
- Trade name, if different from legal name (for instance, if the non-profit goes by an acronym of its full legal name)
- Mailing Address
- Street Address (if different from mailing address)
- County and state of main location
- Name of principle officer, grantor, trustor, owner, etc. (such as the founder, board president, or executive director)
- That person’s social security number
- Type of entity (check “Other non-profit” or “Church or church-controlled organization” as applicable)
- Group Exemption Number (GEN), if applicable
- Reason for applying (check “starting a new business” )
- Date the business was started or acquired
- Closing month of accounting year (the simplest thing is to follow the calendar year, in which case the closing month would be December; otherwise, the closing month is the last month of the non-profit’s fiscal year)
- First date wages or annuities were paid (if no wages have been paid yet, simply write “N/A”)
- Highest number of employees expected in the next twelve months for the following categories: agricultural (write “0”), househould (write “0”), other (write the number of paid employees you expect)
- Expectation of whether the business’s employment tax liability will be less than $1000 that calendar year (please note that even tax-exempt 501(c)3s have to pay employee tax)
- Principal activity (in most circumstances, non-profits will fall under “health care & social assistance” or “other”)
- One-line description of services or products provided
Applicants using a lawyer or other professional can authorize the IRS to send that “third part designee” the assigned EIN or to contact the third party with any questions about the SS-4 application.
How to Apply
There are four simple ways to apply for an EIN:
- By mail: Complete Form SS-4 and mail it to the address provided in the instructions. An EIN will be mailed back.
- By fax: Complete Form SS-4 and fax it to the number provided in the instructions. An EIN will be faxed back within four business days.
- By phone: Call the IRS at 1-800-829-4933 from 7 am to 10 pm local time. Make sure you have all the necessary information on hand. An EIN will be provided over the phone.
- Online: Fill out the online application. An EIN will be provided once the information is verified.
