How to Get an EIN for Your Texas Business

Stop before you pay anyone for an EIN. The IRS issues Employer Identification Numbers for free. No fee, no processing charge, no service payment required. Third-party websites that charge $50 to $300 to "help" you apply are billing you for something the IRS provides at no cost.

An EIN is a nine-digit federal tax identification number, similar in function to a Social Security number for your business. You need one to open a business bank account, hire employees, file federal taxes for an LLC or corporation, and register with the Texas Comptroller for franchise tax and sales tax purposes.

What Is an EIN?

An Employer Identification Number (EIN), also called a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is a unique nine-digit number the IRS assigns to a business entity. It functions like a Social Security number for your business.

An EIN is a federal identifier. It is not the same as a Texas taxpayer number from the Texas Comptroller, though you will likely need both once your business registers for franchise tax or sales tax.

Does Your Texas Business Need an EIN?

Most Texas businesses need an EIN. You are required to have one if your business has employees, operates as a corporation or partnership, files certain federal tax returns, or withholds taxes on income paid to a non-resident alien.

In practice, you need an EIN to open a business bank account for an LLC or corporation, register with the Texas Comptroller, and set up payroll.

A sole proprietor with no employees can sometimes use a Social Security number for federal tax purposes. But an EIN is still a good idea for privacy, since it keeps your SSN off business documents, contracts, and tax filings sent to vendors or clients.

When to Apply for an EIN

Timing matters, especially for LLCs and corporations. The IRS states that legal entities such as LLCs, partnerships, and corporations should form through the state before applying for an EIN. If you apply before your Texas LLC officially exists with the Texas Secretary of State, the IRS may have difficulty matching your application to a recognized entity, which can delay your EIN.

The correct order: file your Certificate of Formation with the Texas SOS, wait for it to be approved, then apply for your EIN. For sole proprietors without an existing formal entity, you can apply at any time.

What You Need Before Applying

•        Your LLC name or legal business name exactly as filed with the Texas SOS

•        The legal name and Social Security number or ITIN of the responsible party (the individual who controls the entity)

•        Your business's principal address in the U.S.

•        The entity type (LLC, corporation, sole proprietorship, partnership, etc.)

•        The primary reason for applying and the number of employees you expect in the next 12 months (can be zero)

Step-by-Step: How to Apply Online With the IRS

1.     Go to IRS.gov and navigate to the EIN application. Make sure you are on the official IRS.gov website, not a third-party lookalike site.

2.     Select "Apply Online Now" to launch the EIN Assistant.

3.     Select your entity type. For a Texas LLC, choose "Limited Liability Company." Answer questions about the number of members and how the LLC is taxed.

4.     Confirm the principal place of business is in the United States. The online tool is only available if the responsible party has a valid SSN or ITIN.

5.     Enter the responsible party's name and SSN or ITIN.

6.     Enter your business name, address, and activity details.

7.     Review the application summary. Confirm everything matches your Texas SOS filing exactly.

8.     Submit. If the application is accepted, your EIN appears immediately on screen. Print or save the confirmation page right then. The IRS does not re-send it automatically.

The entire process takes about 10 minutes when you have your information ready. The online application times out after 15 minutes of inactivity. The IRS limits each responsible party to one EIN application per day.

What to Do After You Receive Your EIN

Save Your Confirmation Letter

Print the EIN confirmation letter immediately or save it as a PDF. If you do not save it during the session, you will need to call the IRS Business & Specialty Tax Line to retrieve the number later, which takes much more time. Keep the confirmation letter with your other formation documents: certificate of formation, operating agreement, and registered agent consent.

Open a Business Bank Account

Your EIN is one of the primary documents most Texas banks require to open a business account, along with your certificate of formation, operating agreement, and ID. Do not use a personal account for business transactions after your LLC is formed. Mingling personal and business funds can undermine the liability protection your LLC provides.

Register for Texas Taxes

Your EIN is a federal number. It does not automatically register you with the Texas Comptroller. After receiving your EIN, register with the Texas Comptroller for franchise tax if your entity type requires it. If you will be making taxable sales, apply for a Texas sales and use tax permit through the Comptroller's website.

Set Up Payroll

If you are hiring employees, set up your federal payroll tax accounts with the IRS using your new EIN. Register with the Texas Workforce Commission for state unemployment insurance.

EIN Mistakes Texas Business Owners Make

Applying before the LLC exists: The IRS recommends forming the state entity first. Applying before your Texas SOS filing is approved can delay your EIN.

Paying a lookalike website: An EIN is free from IRS.gov. Websites that charge for this service are billing you for something you can do yourself at no cost.

Using a nominee as the responsible party: The responsible party should be the person who controls the entity, not a nominee or agent.

Applying multiple times after an error: If your application is rejected, do not submit a new application right away. One EIN per responsible party per day is the limit. Contact the IRS Business & Specialty Tax Line for help correcting errors.

Losing the confirmation letter: The EIN is permanent and does not change, but retrieving it later requires a phone call to the IRS. Save the confirmation letter the moment it appears on screen.

Assuming the EIN registers you in Texas: An EIN is a federal number. Your Texas franchise tax account, sales tax permit, and SOS filing are all separate registrations.

Frequently Asked Questions

Is an EIN free for a Texas business?

Yes. The IRS provides EINs at no charge through IRS.gov. You should never pay for an EIN. Third-party websites that charge for EIN applications are selling a service you do not need to pay for.

Do I need an EIN for a Texas LLC?

Almost certainly yes. You need an EIN to open a business bank account, register with the Texas Comptroller for franchise tax or sales tax, and hire employees. Even a single-member LLC with no employees benefits from having an EIN.

Should I get an EIN before or after forming my Texas LLC?

After. File your Certificate of Formation with the Texas SOS first, wait for approval, then apply for your EIN. The IRS recommends this order for legal entities.

Can a sole proprietor in Texas use an SSN instead of an EIN?

A sole proprietor with no employees and no specific EIN requirement can use an SSN for federal tax purposes. But an EIN protects your SSN from appearing on business documents, contracts, and tax filings sent to vendors or clients.

How fast can I get an EIN online?

The IRS online application issues an EIN immediately upon approval if the application is complete and accurate. The process takes about 10 minutes.

Can I use an EIN to open a business bank account?

Yes. An EIN is one of the key documents banks require to open a business account for an LLC or corporation, along with your certificate of formation, operating agreement, and government-issued ID.

Is an EIN the same as a Texas taxpayer number?

No. An EIN is a federal identification number issued by the IRS. The Texas Comptroller issues a separate Texas taxpayer number when you register for franchise tax or sales tax in Texas. You may need both.

What if I applied for an EIN too early?

If you applied before your LLC was approved by the Texas SOS, contact the IRS Business & Specialty Tax Line. Do not apply again immediately; the one-per-day limit applies per responsible party. Check IRS.gov for guidance on correcting or updating EIN applications.

The Takeawa

An EIN is one of the simplest steps in the Texas business setup process, and one of the most mishandled. The two most common mistakes are paying a third-party website and applying before the LLC exists. Both are avoidable. Go directly to IRS.gov, form your Texas LLC first, have your information ready, and complete the application in one session. Save the confirmation letter the moment it appears.

After your EIN is in hand, your next steps are opening a business bank account and registering with the Texas Comptroller for franchise tax and sales tax if your business activity requires it. For the full Texas business formation sequence, see How to Start a Business in Texas and How to Form an LLC in Texas.

Related Articles

Sources

• IRS – Get an Employer Identification Number (EIN)
• IRS – Telephone Assistance Contacts for Business Customers (Business & Specialty Tax Line)
• Texas Secretary of State – Business and Nonprofit Forms (Certificate of Formation)
• Texas Comptroller – Franchise Tax
• Texas Comptroller – Sales and Use Tax / Online Tax Registration
• Texas Workforce Commission – Unemployment Tax Registration

Disclaimer: This article is for general information only and is not legal, tax, or financial advice. Check with the relevant agency or a qualified professional for your specific situation.