What Is an Employer Identification Number (EIN) and Do You Need One?

An employer identification number (EIN) is a federal tax ID assigned to businesses by the Internal Revenue Service (IRS). Like a Social Security number (SSN) for individuals, it’s a nine-digit number that identifies your business to the IRS, banks, and anyone else with whom your business has a financial relationship.

EINs are often required to open a business bank account, file certain federal taxes, and set up Shopify Payments as a registered business entity. Not all businesses need an EIN: sole proprietors without employees can use their SSN instead.

This guide covers what an EIN is, who needs one, how to apply, and how it connects to the financial and tax infrastructure of running a Shopify store.

What is an EIN?

An employer identification number (EIN) is a nine-digit number the IRS assigns to US businesses for tax and reporting purposes. It’s formatted as XX-XXXXXXX and functions as a business’s federal tax ID number. 

The IRS uses EINs to:

• Track tax obligations
• Process business tax returns
• Issue tax documents

Banks, suppliers, and government agencies use them to verify a business’s legal identity when: 

• Opening accounts
• Extending credit
• Entering into contracts

EIN vs. SSN, ITIN, TIN, and state tax ID

The US tax system uses several different identification numbers, each with a distinct purpose. 

Here’s how they differ:

A state tax ID is separate from an EIN, and you have to register for both separately.

Who needs an EIN?

Businesses and organizations generally need an EIN to: 

• Hire employees
• Operate a partnership or corporation
• Pay sales and excise taxes
• Change business structures or ownership

Sole proprietors and single-member limited liability companies (LLCs) without employees aren’t always required to get EINs.

Do sole proprietors and single-member LLCs need EINs?

A single-member LLC classified as a disregarded entity can use the owner’s SSN or an EIN when filing federal taxes. The same goes for sole proprietorships.

That changes if any of the following apply:

• The business hires employees
• The single-member LLC has to register for excise tax activities or pay and report excise taxes
• The sole proprietorship establishes a qualified retirement plan
• A sole proprietor files for bankruptcy

When you’re required to get one—and when it’s optional but smart

The IRS has a full list of conditions that necessitate an EIN, but the most common triggers for ecommerce store owners are:

• Hiring employees
• Forming an LLC, corporation, or partnership
• Opening a business bank account—an EIN (or SSN for sole proprietors) is a common bank request 

Sole proprietors and single-member LLCs might still choose to register for an EIN to:

• Keep their business and personal finances separate 
• Provide a more secure alternative to including an SSN on vendor forms 
• Increase their business’s sense of professionalism 

What is an EIN used for?

You’ll use your EIN for a number of business actions, including opening a business bank account and getting set up with suppliers. Here’s how each one works.

Opening a business bank account

An EIN (or SSN for sole proprietors) is among the most common documents financial institutions request when opening a business account. Having a dedicated business account keeps personal and business finances separate, which matters when it’s time to file taxes or apply for business credit.

For ecommerce store owners operating as a registered business entity, an EIN is also required to set up Shopify Payments. (If you’re setting up Shopify Payments as an individual, you can use an SSN.)

Filing federal taxes (employment, excise, income)

Corporations, partnerships, and multimember LLCs file income taxes with their EIN. For businesses with employees, it’s required on employment tax returns, including Form 941 (quarterly payroll taxes) and Form W-2 (annual wage reporting).

For sole proprietors and single-member LLCs using Shopify Payments, your EIN also determines how Form 1099-K is issued. Shopify reports income to the IRS under the business name and EIN for registered entities, and under the SSN or ITIN for individuals.

Depending on your business structure, Shopify Tax automated filing may also require an EIN at setup. The business name, address, and EIN must match exactly what’s on file with the Department of Revenue.

Working with vendors, suppliers, and B2B partners

When a business pays a vendor or contractor $2,000 or more in a year, starting in 2026, the IRS requires you to collect that vendor’s TIN via Form W-9. For business entities, the TIN on the W-9 is the EIN. Without it, the paying business may be required to apply backup withholding at 24% on payments.

The same applies the other way around: vendors and wholesale suppliers routinely request a Form W-9 from new buyers before processing orders, since they face the same IRS reporting obligations. For store owners buying wholesale or working with dropshipping suppliers, having an EIN (or SSN for sole proprietors) ready to provide on a W-9 is part of the standard onboarding process.

EINs and your Shopify store

Two areas of Shopify’s US setup are impacted by whether an EIN is on file: 

• Activating Shopify Payments as a registered business entity
• How income gets reported to the IRS at year’s end

Setting up Shopify Payments as a registered business entity

When setting up Shopify Payments, the tax ID required depends on business type. Sole proprietors use their SSN or ITIN. For single-member LLCs, there’s an option to report using either an EIN or SSN/ITIN. 

For all other registered business types—partnerships, corporations, non-profits—an EIN is required.

If the EIN can’t be verified, Shopify may request an IRS document such as an SS-4 or 147c Letter. The registered name and EIN in the account must match exactly what appears on the IRS document. Mismatches can result in failed payouts and a hold on Shopify Payments charges.

How Shopify reports your income to the IRS using your EIN (1099-K)

US tax law requires payment settlement entities such as Shopify Payments to file a Form 1099-K with the IRS for store owners who meet annual reporting thresholds. The tax ID on file, either the EIN or SSN/ITIN, determines whose name the form is issued under.

For sole proprietors and individuals, Shopify reports income under the account representative’s name and SSN or ITIN. For single-member LLCs, the same applies unless the LLC has elected to be taxed as a corporation. For all other registered business types, Shopify reports income under the registered business name and EIN. 

The IRS requires payment settlement entities such as Shopify Payments to file a Form 1099-K when total gross payments to a store owner exceed $20,000, and transactions exceed 200 in a calendar year—though federal thresholds are subject to change. Some states have lower thresholds—check the Shopify Help Center for current figures.

The 1099-K is available to download from your Shopify admin under Finance > Documents once generated.

How to get an EIN: step-by-step

There are four ways to apply for an EIN, all of which are free: 

• Online
• By fax
• By mail
• By phone

Apply online through the IRS (instant)

When you complete an IRS online EIN application, your EIN will be issued immediately upon approval. To be able to apply online, your principal place of business needs to be in the US or a US territory and you need to be the business’s responsible party or an authorized representative, or have access to the responsible party’s SSN. (If your business isn’t linked to an address in the US or a US territory, you can apply by fax, mail, or phone.)

If you’re forming an LLC, partnership, or corporation, register with your state before applying. Submitting the EIN application before state formation can delay processing.

To complete the online application, have the following ready:

• Your business entity type
• The responsible party’s SSN or ITIN

You have to complete the application in a single session, and you’re limited to one EIN per responsible party per day. Print or save the confirmation letter at the end of the session; the IRS won’t reissue it.

The online tool is available Monday through Friday, 6 a.m. to 1 a.m. ET; Saturday, 6 a.m. to 9 p.m. ET; and Sunday, 6 p.m. to midnight ET.

Apply by mail or fax

If you’re not able to apply online or prefer a different method, Form SS-4 can be submitted by fax, mail, or phone. 

Fax

You can fax in Form SS-4 24 hours a day, seven days a week. When you send it in, be sure to include your fax number so the IRS can fax your EIN back, usually within four business days. 

• Business owners with a presence in the US: Fax form to (855) 641-6935.
• Business owners without a US presence: Fax form to (855) 215-1627 if within the US, or (304) 707-9471 if outside the US.

Mail

It takes up to four weeks to receive an EIN when you mail in your application. 

• Business owners with a presence in the US: Mail Form SS-4 to Internal Revenue Service, Attn: EIN Operation, Cincinnati, Ohio 45999. Processing takes about four weeks.
• Business owners without a US presence. Mail form to Internal Revenue Service, Attn: EIN International Operation, Cincinnati, Ohio 45999.

Phone (instant)

If you’re a business owner without a US presence, you can also submit your application over the phone. The IRS recommends filling the form out ahead of time, and the person making the call needs to be authorized to receive the EIN.

Call (267) 941-1099 (not a toll-free number), Monday through Friday, 6 a.m. to 11 p.m. ET. 

How long does it take to receive your EIN?

Processing time depends on the application method:

• Online: Immediate upon approval.
• Phone: Immediate upon approval.
• Fax: Four business days.
• Mail: About four weeks.

Once the EIN is issued, it can be used immediately to open a bank account, apply for business licenses, or file a tax return by mail. The IRS notes that waiting up to two weeks is required before using the EIN to e-file a tax return, make electronic tax deposits, or pass a TIN matching program check.

Where to find your EIN number

If your EIN isn’t on hand, you can find it:

• EIN confirmation letter (CP 575). The IRS mails this when an EIN is first issued. It’s the primary record of the EIN and should be kept on file.
• Previously filed tax returns. The EIN appears on any federal business tax return filed under that entity—Form 1120, 1065, 941, or Schedule C, depending on business structure.
• Business bank account documents. Banks collect the EIN at account opening. It appears on account agreements and related correspondence.
• State business filings. The EIN is often included on state registration documents, licenses, or annual report filings.
• Payroll records and W-2s. If the business has employees, the EIN appears on every W-2 issued and on payroll tax filings.

If none of these are available, call the IRS Business and Specialty Tax Line at (800) 829-4933, Monday through Friday, 7 a.m. to 7 p.m. local time. The IRS will verify identity and provide the EIN over the phone to authorized individuals.