An Employer Identification Number, or EIN, is a unique nine-digit identifier issued by the Internal Revenue Service (IRS) for businesses operating in the United States. This number functions much like a Social Security Number (SSN), but for companies instead of individuals. The EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) and is primarily used for tax purposes.

Businesses use their EINs to file federal taxes, hire employees, open business bank accounts, and apply for necessary permits and licenses. It serves as an essential element for any legally operating business entity and helps the government distinguish one business from another for tax compliance.

An EIN is also referred to as an Employer Account Number (EAN) in several states. While the names may differ from state to state, they refer to the same concept—an identification number that helps businesses interact with state and federal tax systems. Whether it’s used for paying unemployment insurance taxes, wage reporting, or payroll tax filing, an EIN or EAN plays a foundational role in business administration.

The Purpose of the EIN for Businesses

Every business, regardless of its structure or size, interacts with the government on some level, especially when it comes to taxes. The EIN allows the IRS and state tax agencies to identify and track these interactions. For example, when a business hires employees, it needs to withhold and pay Social Security and Medicare taxes. To do this legally, one must first obtain an EIN.

This number is also used to process payroll, issue W-2 forms to employees, and complete tax forms like Form 941 (Employer’s Quarterly Federal Tax Return). Even businesses without employees often need an EIN to open a business checking account, establish credit, or operate as a corporation or partnership.

Some business owners choose to obtain an EIN even if it’s not mandatory, especially sole proprietors. The reason is often to avoid using their SSNs in business-related documents, which helps reduce identity theft risk.

When an EIN Becomes Necessary

A common misconception is that only large or incorporated businesses require an EIN. In reality, several types of business activities automatically trigger the need for one. If your business has employees, withholds taxes on income (other than wages), operates as a corporation or partnership, or has a Keogh retirement plan, then it must apply for an EIN.

Household employers, such as those who hire a nanny, also need an EIN if they pay their household employee more than a certain threshold in a calendar quarter. This threshold can vary by state, but the rule generally applies across the board.

Additionally, businesses that plan to apply for certain types of licenses or permits may be required to submit their EIN as part of the application. Even online payment processors and banking institutions often ask for an EIN to verify the legitimacy of a business before opening accounts or granting loans.

Employer Account Number vs Employer Identification Number

Although EIN and EAN are often used interchangeably, there are technical differences depending on jurisdiction. An Employer Account Number is the term used by many states to refer to the state-level version of the EIN. These identifiers are typically required for paying state taxes, including unemployment insurance tax and state withholding tax.

The format of these numbers can vary. For instance, while the federal EIN is always nine digits in the format XX-XXXXXXX, state EINs can be eight or ten digits, sometimes with leading or trailing zeroes. In some states, such as Michigan, the state EIN may mirror the federal EIN. In other states, like California or New York, businesses are assigned separate identification numbers for different tax functions.

Despite the variation in terminology, the fundamental purpose remains the same: to uniquely identify a business within the tax system, ensuring that tax filings, payments, and correspondence are correctly matched to the appropriate entity.

The Role of FEIN in Federal Tax Compliance

The term FEIN refers specifically to the federal-level EIN. This number is used to report income taxes, employment taxes, and excise taxes to the IRS. Businesses use the FEIN when filing annual income tax returns and making estimated tax payments. It’s also the number associated with reporting taxable benefits, such as health insurance coverage or retirement contributions.

Most types of legal business structures, including LLCs, corporations, partnerships, and nonprofit organizations, must have a FEIN. Even trusts and estates that generate income are required to obtain one. The IRS uses this number to process tax forms, issue refunds, and track the tax history of each registered entity.

Because it’s essential to multiple aspects of compliance, the FEIN must be accurate and current. If a business changes ownership, structure, or location, it may need to update its records with the IRS and, in some cases, apply for a new FEIN altogether.

The Difference Between EIN, EAN, and FEIN

Though used interchangeably, it’s helpful to understand the subtle distinctions between these terms. EIN is a general term for the identifier issued to a business. When used in the federal context, it becomes a FEIN. At the state level, the equivalent number is often called an EAN. Here’s how they generally differ:

• EIN: A general tax ID for a business; may refer to either federal or state identifiers.

• FEIN: Specifically refers to the federal tax ID number issued by the IRS.

• EAN: Refers to the state-level tax ID used for state-specific obligations like payroll and unemployment taxes.

Certain states have their terminology. For example, in California, businesses may receive an “EDD State ID Number,” while Wyoming uses a “wage withholding account number.” Despite the different names, these identifiers serve a similar function at the state level.

Why a Sole Proprietor Might Still Need an EIN

Sole proprietors are generally not required to get an EIN unless they hire employees or meet other specific criteria. They can use their SSN to meet tax obligations. However, many choose to obtain an EIN voluntarily to keep their personal and business finances separate.

Using an EIN on forms and applications can prevent unnecessary disclosure of an individual’s SSN, reducing the risk of identity theft. This is especially important when filling out W-9 forms for clients or applying for business licenses. It also helps establish credibility when dealing with banks, vendors, or potential partners.

Additionally, an EIN makes it easier to convert a sole proprietorship into an LLC or corporation down the line, since many of these structures require an EIN regardless of whether there are employees.

Multi-State Employers and Multiple EINs

Businesses that operate in more than one state may need to obtain state EINs for each jurisdiction where they have employees. State laws vary widely in how they handle income tax, unemployment insurance, and business registration, so a company with employees in California and Texas might need separate EANs for each state.

These state-level identifiers are required to file quarterly wage reports, remit withholding taxes, and comply with other employment-related regulations. Some states issue multiple account numbers to the same business for different tax purposes. For example, one number may be used for unemployment insurance and another for sales tax.

Staying compliant in multiple states requires careful recordkeeping and an understanding of each state’s requirements. Many businesses choose to work with payroll providers or tax professionals to manage these obligations effectively.

State-Level Tax Obligations and EIN Requirements

Each state has its own set of rules regarding tax collection and reporting. In states that impose income or employment taxes, obtaining an EIN is typically one of the first steps in business registration. This number is used to report payroll taxes, unemployment contributions, and wage data.

In addition to wage-related taxes, some states use the EIN to track sales tax, franchise tax, and use tax. For example, a business that sells goods in Texas may need to register for a sales and use tax permit using its EIN.

Not all states impose the same taxes. Seven states have no personal income tax, and two—Wyoming and South Dakota—do not levy corporate income taxes. However, most states require some form of registration and use the EIN or EAN as part of that process.

Using the EIN for Financial and Legal Transactions

Beyond taxes, the EIN is often required for opening business bank accounts, applying for loans, and signing contracts. Banks and lenders use the number to verify the legitimacy of a business and to pull credit reports when evaluating loan applications.

Vendors and suppliers may request your EIN when setting up accounts or issuing payments. Similarly, government agencies often require it when applying for licenses, permits, or grants.

Many online services, including payment processors and accounting software, require users to input an EIN to access full functionality. This is especially common for platforms that facilitate payroll or benefits administration.

Do You Need an Employer Account Number (EAN)? Here’s What to Know

While a federal EIN is commonly required for most business activities across the U.S., many business owners overlook the importance of having a state-specific Employer Account Number (EAN). This number is issued by the relevant state agency—often the Department of Revenue, Labor, or Employment Security—and is used for reporting and paying state-level payroll taxes, especially unemployment insurance and wage withholding taxes.

Understanding when and why you need an EAN is critical to avoiding penalties, delays in processing payroll, or compliance issues with your state tax authority. Whether you’re hiring your first employee or expanding to another state, securing the correct EAN(s) should be high on your to-do list.

When Does Your Business Need a State EAN?

The requirement for an EAN generally arises when a business has employees and is therefore responsible for paying state unemployment insurance (SUI) tax or withholding state income tax from wages. However, the specifics vary depending on your location and business activities.

Here are typical scenarios where a state EAN is required:

• Hiring employees who reside in or work within a particular state

• Paying wages above a certain threshold that triggers SUI obligations

• Withholding state income taxes from employees’ paychecks

• Reporting new hires to the state directory

• Paying disability insurance or workforce development taxes (in select states)

If your business has any form of payroll in a state, that state likely requires an EIN. Not having one can result in processing errors, late fees, or even the inability to file required returns.

Distinction Between Federal EIN and State EIN

At a glance, both numbers seem to serve the same function: to identify a business. But their jurisdictions are different.

• Federal EIN: Issued by the IRS and used for federal payroll taxes, federal income tax filings, and federal employee forms like the W-2 or 941.

• State EAN: Issued by a state agency and used exclusively for state-level employment and payroll tax purposes.

For example, a business may use its federal EIN to file Form 941 each quarter with the IRS, but it must use a separate EIN to submit Form DE-9C in California, which reports employee wages for state unemployment insurance.

Some states do align the EAN closely with the federal EIN (e.g., mirroring the digits), but many issue an entirely different number, sometimes with a unique format, prefix, or suffix.

Examples of EAN Requirements by State

Each state has a different process for assigning Employer Account Numbers. Here’s a look at how this plays out in a few states:

• California: Employers must register with the Employment Development Department (EDD) to receive a state employer account number. This number is used to pay unemployment insurance, state disability insurance, and employment training taxes.

• New York: Employers register with the Department of Labor and are assigned a UI Employer Registration Number, separate from their federal EIN. They may also receive a Withholding Identification Number from the Department of Taxation and Finance.

• Texas: Businesses register with the Texas Workforce Commission to receive a state tax account number used for unemployment tax purposes.

• Florida: Even though Florida has no personal income tax, employers must still register with the Department of Revenue to pay reemployment tax (formerly known as unemployment tax).

Each of these processes requires submitting business information, ownership details, federal EIN, and sometimes wage estimates to determine tax liability.

Applying for an EAN: Step-by-Step

Getting an EAN is generally a straightforward process, though it does require attention to detail. Most states allow you to register online, while others accept paper or phone applications.

Here is a typical step-by-step process:

1. Determine Eligibility

Make sure your business meets the criteria to register for state employment taxes. Most states define this as having one or more employees who work for any portion of a day during a calendar quarter.

2. Gather Required Information

Before you begin, you’ll need:

• Your federal EIN

• Legal business name and DBA (if applicable)

• Business address and contact info

• Type of business entity (LLC, sole proprietorship, etc.)

• Names and Social Security Numbers of owners or officers

• Estimated payroll or number of employees

• The date when employees first began work in the state.

3. Visit the State’s Registration Portal

Locate your state’s Department of Revenue or Labor website. Common platforms include:

• California: EDD e-Services for Business

• New York: Business Express or DOL Online Services

• Texas: Unemployment Tax Services (UTS)

• Florida: Department of Revenue e-Services

4. Complete and Submit the Application

Fill out the online or paper form. Some states will issue the EAN immediately upon successful registration; others may take several business days to process.

5. Receive Confirmation

After approval, you’ll get a letter or email confirming your EAN. Save this in a secure location, as you’ll need it for tax filings, wage reports, and correspondence with the state.

What Happens If You Don’t Get an EAN?

Failing to obtain a state EAN when required can lead to a series of escalating consequences, including:

• Late filing penalties for not submitting state payroll returns on time

• Interest on unpaid taxes

• Ineligibility for business licenses or contracts

• Difficulty opening payroll accounts with banks or processors

• Loss of good standing with the Secretary of State or the Department of Revenue

In some cases, states will assign you an EAN retroactively once they detect that you’ve hired employees. However, this can confuse when trying to catch up on back taxes and may lead to misapplied payments or duplicate filings.

Are There Situations Where You Don’t Need an EAN?

Yes. If you are a sole proprietor with no employees and you’re not subject to state-level withholding taxes, you may not need a state EIN. Similarly, if your business operates in a state that does not levy unemployment or income taxes (e.g., South Dakota, Texas for income tax), you may not need to register unless you pay wages above a state-defined threshold.

Still, many business owners choose to register voluntarily to establish legitimacy, simplify payroll processing, or prepare for growth.

Do Independent Contractors Trigger EAN Requirements?

Typically, no. Paying independent contractors does not usually require an EIN, since you are not responsible for withholding or paying employment taxes on their behalf. You would issue them Form 1099-NEC at the end of the year and report this to the IRS using your federal EIN.

However, if your state has specific worker classification rules or if you’re found to have misclassified employees as contractors, you could retroactively owe payroll taxes and be required to register for an EIN.

Multi-State Registration and EANs

If your business operates in multiple states or has remote workers spread across state lines, you will likely need separate EANs for each jurisdiction where employment tax obligations exist. This can significantly complicate payroll administration, as you must:

• Register with each state separately

• File quarterly or annual wage reports per state..

• Stay up-to-date on tax rate changes and rule updates.

• Comply with new hire reporting laws in every state.

In this case, using multi-state payroll software or working with a tax compliance provider can help ensure timely, accurate filings and avoid duplicate payments.

Do You Need a New EAN When Your Business Changes?

In general, your EAN stays the same as long as your business continues operating in the same state under the same structure. However, certain changes might require a new EAN or an update to your registration:

• Change of ownership or legal structure (e.g., sole proprietorship to LLC)

• Merger with or acquisition of another business

• Relocation to a different state (may require new registration)

• Change in FEIN (which must be updated at the state level)

Always notify your state’s Department of Revenue or Labor when such changes occur. In some cases, the system will prompt you to cancel your current EAN and apply for a new one.

How to Keep Your EAN in Good Standing

Once you have an EAN, it’s important to keep it active and in compliance. Here’s how:

• File reports on time: Quarterly wage reports and UI tax returns must be filed promptly.

• Pay taxes as due: Many states require electronic payment of withholding and UI taxes.

• Respond to correspondence: States may send notices or requests for clarification—never ignore these.

• Update your information: Any change in address, ownership, or number of employees should be reported.

• Close your account if no longer needed: If you cease operations or no longer have employees, officially close your account to avoid penalties.

How to Use Your EIN and EAN for Payroll, Banking, and Taxes

Once you’ve obtained your Employer Identification Number (EIN) and any required state Employer Account Numbers (EANs), the next step is knowing how to use them in your daily operations. These identification numbers aren’t just formalities—they’re gateways to hiring employees, processing payroll, filing taxes, and building business credit.

We unpack the practical uses of your EIN and EAN so you can operate efficiently, stay compliant, and optimize your business structure.

Why These Numbers Matter After Registration

Once you have your EIN from the IRS and your EAN from the state labor department (if applicable), you’ve completed a critical administrative milestone. But that’s only the beginning. These numbers will be referenced repeatedly in a wide variety of business functions:

• Opening bank accounts

• Applying for licenses or permits

• Running payroll

• Filing federal and state taxes

• Completing employee-related documents

• Applying for loans or credit

Treat your EIN and EAN as sensitive and official identifiers—almost like a Social Security Number, but for your business.

Using EIN for Business Banking

One of the first and most common uses of the EIN is to open a business bank account. Most financial institutions require it to:

• Separate your personal and business finances

• Establish business credit history.

• Accept payments under your company name.

• Apply for loans or credit cards in your business’s name.

Even sole proprietors who don’t have employees often get an EIN specifically for banking purposes. It helps create a clear boundary between personal and business finances, which is essential for maintaining liability protection in corporations or LLCs.

To open a business bank account using your EIN, you typically need:

• Your EIN confirmation letter from the IRS (Form SS-4 approval)

• Articles of incorporation or organization

• Operating agreement (for LLCs)

• Personal identification

Once the account is set up, the EIN becomes the main tax ID associated with your banking activity.

Using EIN and EAN for Payroll and Withholding

If you hire employees, your EIN and EAN are central to payroll processing.

EIN: Federal Payroll Obligations

Your federal EIN is used to:

• Withhold federal income tax

• Withhold and pay Social Security and Medicare taxes (FICA)

• File Form 941 (quarterly employer’s federal tax return)

• File Form 940 (annual federal unemployment tax return)

• Issue Form W-2 to employees

• Report wages and tax payments to the IRS

Every federal form related to employment taxes will ask for your EIN, not your business name alone.

EAN: State Payroll Obligations

Your EAN is used for state-specific requirements, such as:

• State unemployment insurance (SUI) payments

• State income tax withholding (in applicable states)

• Filing new hire reports with the state directory

• Issuing state W-2 equivalents

Example:

• A California employer will use their EIN on IRS Form 941 and their EDD EAN to submit Form DE-9C for California’s Employment Development Department.

Your payroll software must be configured with both your EIN and EAN to route tax payments and filings correctly to each government agency.

Setting Up Payroll With EIN and EAN

Here’s a practical checklist to help you set up payroll using your identifiers:

1. Choose a Payroll System

Decide if you’ll process payroll in-house or use a third-party provider. Many small businesses opt for cloud-based platforms like:

• Gusto

• QuickBooks Payroll

• ADP

• Paychex

These systems allow you to input both federal and state ID numbers during setup.

2. Add Your EIN

Enter your EIN as the primary identifier for all federal payroll filings and deposits. This links your tax filings to your IRS account.

3. Input Your EAN(s)

If you operate in multiple states, input each state-specific EAN where you have employees. Make sure to assign the correct EAN to each employee record based on their work location.

4. Set Up Electronic Funds Transfer (EFT)

Register for EFTPS (Electronic Federal Tax Payment System) with your EIN to make federal payroll tax deposits. Many states have similar portals where you’ll use your EAN to pay unemployment or withholding taxes.

Using EIN and EAN for Tax Filings

Your EIN and EAN also guide your tax filing responsibilities beyond payroll.

EIN for Federal Tax Returns

Your EIN is used to file:

• Annual tax return for your business (Form 1120 for corporations, 1065 for partnerships, etc.)

• Information returns (e.g., 1099-NEC for contractor payments)

• Employment tax returns (Forms 940, 941)

• Excise tax filings (if applicable)

Make sure your EIN is current and correct on every return. A mismatch can lead to rejected filings or delayed refunds.

EAN for State Tax Returns

States require different returns depending on your location. You’ll often use your EAN on:

• Quarterly wage and withholding reports

• Unemployment insurance contributions

• State W-2s or reconciliations

• Local employment or disability tax returns

Your payroll software or state tax portal will prompt you for the EAN at login or during form submission.

Using EIN for Business Credit and Loans

Another key use of your EIN is to build business credit independent of your credit. Lenders, vendors, and credit bureaus use your EIN to evaluate your business’s financial trustworthiness.

You’ll need your EIN to:

• Apply for a business credit card

• Set up trade lines with suppliers.

• Apply for SBA loans or lines of credit.

• Register with commercial credit bureaus (like Dun & Bradstreet)

Over time, maintaining good standing on accounts associated with your EIN helps you build a business credit profile. This can open doors to better loan terms, larger contracts, and reduced need for personal guarantees.

EIN on Employee and Contractor Forms

As an employer or payer, you’ll use your EIN when issuing:

• W-2 forms to employees

• 1099-NEC forms for independent contractors

• W-3 forms, which summarize all W-2s

• 1096 forms, summarizing 1099s

Each of these forms requires your EIN so the IRS can match the information to your business tax account.

Incorrect EINs or mismatches with IRS records can lead to penalties and delays in employee tax refunds.

Updating EIN or EAN Information

Sometimes you need to update your EIN or EAN details. Common situations include:

• Business name change

• Address change

• Ownership or structure change

• Merger or acquisition

For EIN updates, notify the IRS using Form 8822-B. For EAN changes, contact your state’s Department of Revenue or Labor directly. Some states allow updates online; others may require a written request.

Maintaining Compliance with EIN and EAN

It’s not enough to simply obtain these numbers—you must actively maintain them by:

• Filing all required returns on time

• Making accurate and timely payments

• Reporting changes promptly

• Renewing licenses or permits that depend on them

• Keeping your contact information current with the IRS and state agencies

Failure to maintain good standing can result in fines, liens, or even the revocation of your EAN, making it illegal to employ workers in that state.

Keeping EIN and EAN Secure

Because EINs and EANs are used in many sensitive transactions, treat them with care:

• Don’t post them publicly on websites or marketing materials

• Restrict access to key personnel only.

• Use secure portals when submitting tax forms or payments.

• Monitor for unauthorized filings or changes using IRS and state tools.

In some cases, EINs have been used in fraudulent loan applications or fake tax returns. Contact the IRS or your state’s tax agency immediately if you suspect misuse.

Using EIN and EAN with Accounting and HR Software

Most accounting and HR platforms integrate EIN and EAN fields into their onboarding process. Ensure the information you input matches exactly what was assigned to you by the IRS or state. This ensures:

• Tax forms are auto-filled correctly

• Payments are sent to the correct agencies..

• Year-end filings like W-2s and 1099s are error-free

• Integration with banks and third-party apps is seamless..

If you’re using a platform like QuickBooks, Xero, or Gusto, regularly audit your EIN/EAN setup as part of your year-end review.

Troubleshooting, Updating, and Changing Your EIN and EAN: What Every Business Owner Needs to Know

Understanding and using your Employer Identification Number (EIN) and Employer Account Number (EAN) is crucial for smooth business operations, but sometimes issues arise. Businesses grow, structures change, and errors happen. Knowing how to troubleshoot common problems, update your information, and handle changes to your business structure can save you headaches, penalties, and delays.

We walk you through common EIN/EAN challenges, how to fix them, and what steps to take when your business evolves.

Common EIN and EAN Issues and How to Resolve Them

1. Lost or Forgotten EIN or EAN

If you lose your EIN or forget it, don’t panic. Your EIN is needed for tax filings and banking, so retrieving it quickly is important.

• Find your EIN on official documents:
  • IRS EIN confirmation letter (Form SS-4)

  • Previous tax returns filed by your business

  • Bank account opening documents

  • Payroll filings or reports

• Contact the IRS Business & Specialty Tax Line:
  • Call 800-829-4933 (available Monday to Friday, 7 a.m. to 7 p.m. local time)

  • You must be an authorized person to receive the EIN over the phone.

• State EAN Retrieval:
  • Check your state’s labor or employment department website.

  • Call the agency’s employer assistance line.

  • Look for your state wage and tax statements or unemployment insurance filings.

Keep a secure record of your EIN and EAN once found to avoid future inconvenience.

2. Incorrect EIN or EAN on Tax Returns or Filings

Using the wrong EIN or EAN on federal or state tax forms is a common mistake, leading to rejected filings or mismatches.

• The IRS or state may send you a notice of a mismatch or a request for correction.

• To resolve, verify the EIN or EAN on your official IRS or state confirmation documents.

• Amend the return or filing with the correct number.

• If necessary, call the IRS Business & Specialty Tax Line or your state agency for guidance.

3. EIN Is Not Recognized or Shows as Invalid

If the IRS system doesn’t recognize your EIN, it may be due to:

• Incorrect entry of the number.

• Your EIN is being revoked or canceled due to inactivity or fraud.

• A business structure change requires a new EIN (covered later).

To address this:

• Double-check the EIN for accuracy.

• Contact the IRS Business & Specialty Tax Line for status confirmation.

• If your EIN was revoked, you’ll need to apply for a new one.

4. State EAN Does Not Match or Is Not Active

State unemployment or tax agencies sometimes show your EAN as inactive or invalid if:

• You’ve recently registered, and the system hasn’t updated.

• Your account was suspended due to non-payment or non-filing.

• You changed your business structure without notifying the state.

Resolve by:

• Contact your state agency’s employer services.

• Ensuring all filings and payments are current.

• Submitting any required updates or registrations.

How to Update Your EIN Information with the IRS

Your EIN information with the IRS can be updated to reflect changes like business name, address, or responsible party.

When to Update Your EIN Info

• Change of business address or mailing address

• Change of business name (after approval)

• Change in the principal officer, general partner, or owner who controls the business.

• Change in entity structure that does NOT require a new EIN (e.g., changing the name of a corporation but retaining corporate status)

How to Update

• Change of Address:
  • File Form 8822-B (Change of Address or Responsible Party — Business) with the IRS.

  • Submit within 60 days of the change.

• Change of Business Name:
  • For corporations, notify the IRS on your annual tax return or by letter.

  • For sole proprietors, write a letter to the IRS if the EIN has already been issued.

• Change of Responsible Party:
  • Also reported on Form 8822-B.

Important Notes

• Updates to EIN information do not change the EIN itself.

• Always keep copies of your submitted forms and confirmations.

When Do You Need a New EIN?

Not all changes require a new EIN. Knowing when a new EIN is mandatory helps you stay compliant.

Changes Requiring a New EIN

• Change in ownership structure (e.g., sole proprietor to corporation)

• Partnership formation (new entity)

• Corporation or partnership dissolution and formation of a new entity

• An acquisition or merger where the acquiring company creates a new legal entity

• Bankruptcy or reorganization in some cases

• Change in tax status (e.g., from C-corp to S-corp, if required by IRS)

Changes NOT Requiring a New EIN

• Change of business name (keeping the same entity type)

• Change of business address or phone number

• Change in officers, partners, or members of the business.

• Business restructuring that does not create a new entity (e.g., converting from a single-member LLC to a multi-member LLC without forming a new entity)

If uncertain, consult the IRS or a tax professional before applying for a new EIN.

How to Apply for a New EIN

If your business changes require a new EIN, you must apply through the IRS. You can:

• Apply online through the IRS EIN application portal (available for U.S. businesses)

• Apply by mail or fax using Form SS-4

• Apply by phone (only for international applicants)

Once assigned, this new EIN replaces the old one for all federal tax matters.

Updating Your State Employer Account Number (EAN)

Like the IRS, your state requires you to update your Employer Account Number information for state taxes and unemployment insurance.

Common Reasons to Update Your EAN

• Change of business address or location

• Change of ownership or legal structure

• Change in business name or trade name

• Adding or removing business activities

How to Update

• Contact your state’s Department of Labor or Employment Security Commission.

• Many states allow online updates through employer portals.

• Submit the required forms or documents for ownership changes or restructuring.

• Ensure your payroll provider or accountant updates the EAN in payroll systems.

Closing or Cancelling EIN and EAN Accounts

If you close your business or cease to have employees, you may want to cancel your EIN and EAN accounts.

Closing Your EIN Account

The IRS does not “cancel” EINs but notes the account as closed. You must:

• File all required final tax returns

• Write a letter to the IRS including:
  • Your EIN

  • Legal name and address of the business

  • Reason for closing the account (e.g., business closure)

• Send the letter to the IRS address where you file your returns.

Closing Your State EAN

• File your final state tax and unemployment reports.

• Notify your state labor or tax department in writing or through their online portal.

• Request account closure confirmation

Keep records of closure confirmations in case of future questions.

EIN and EAN in Business Mergers, Acquisitions, and Sales

Business transactions like mergers or acquisitions can complicate EIN/EAN status.

Mergers and Acquisitions

• The surviving entity may continue using its EIN.

• The acquired entity’s EIN may be discontinued.

• For tax purposes, you must notify the IRS and state agencies of changes.

• Payroll systems need updates to reflect correct EIN/EAN usage.

Business Sales

• If selling your business, typically, the buyer obtains a new EIN.

• You file final tax returns for your EIN.

• Notify the IRS and state agencies of the sale.

Consult tax advisors during these transactions to ensure EIN/EANs are handled correctly.

Dealing with EIN and EAN Fraud or Misuse

Unfortunately, EINs and EANs can be targets of identity theft or fraudulent use.

Signs of Misuse

• Receiving tax notices or penalties for taxes you did not incur

• Unauthorized business credit applications

• Employees or contractors reporting incorrect tax records

What to Do

• Report fraud immediately to the IRS and state tax agencies

• File Form 14039 (Identity Theft Affidavit) with the IRS if necessary

• Monitor your business credit reports regularly.

• Notify your bank and payroll providers of suspicious activity

Best Practices to Manage Your EIN and EAN

• Keep EIN and EAN documentation in a secure, easily accessible location

• Record all communications with the IRS and state agencies regarding these numbers

• Regularly verify your business information on the IRS and state portals.

• Use trusted payroll and accounting software that automatically updates EIN/EAN data.

• Consult professionals when making business structural changes

Final Thoughts

Your EIN and EAN are more than just numbers—they are vital identifiers that govern how you interact with tax agencies, employees, banks, and vendors. As your business grows and evolves, so too must your understanding and management of these accounts.

Mistakes or neglect in handling EIN or EAN information can lead to penalties, delays, or lost opportunities. On the other hand, diligent upkeep ensures your business remains compliant, can access financial products, and pays employees and taxes correctly.

Keep this guide handy as a reference for managing your EIN and EAN throughout the life of your business. And don’t hesitate to seek expert advice when in doubt.