Is the state id number the same as the ein

State tax ID numbers and federal Employer Identification Numbers are assigned to businesses that employ workers, but EINs can also be assigned even if the company has no workers. Unless your work involves processing business documents, such as business loan or license applications, in most cases these identification numbers won’t mean much to you until you prepare your income tax return at the end of the year.

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An EIN is issued by the Internal Revenue Service and is used for federal purposes. Some states issue their own tax ID number to businesses for state tax purposes.

State Tax ID Systems

State tax ID numbers are issued by the department of revenue or similar agency in the state where the business is located. This number is associated only with the state that issues it. If a company relocates to another state, it will have to get a new state tax ID. EINs are issued by the Internal Revenue Service and typically stay with a business for as long as the company is open. The IRS is a national agency, so even if a business relocates and has to get a new state tax ID, its EIN will stay the same.

An EIN serves as an identification number for a business, similar to the way a Social Security number identifies a person. Primarily, companies use an EIN to identify themselves on income tax and employment tax returns. However, because the EIN is a national identifier that doesn’t change or get reassigned during a company’s existence unless the structure or ownership changes, a business may also use its EIN to make loan applications, open bank accounts and apply for licenses.

A company generally uses a state tax ID solely for state tax reporting. Some states may also call their identifier a state employer identification number, or SEIN number. Unlike a federal EIN, state tax ID numbers aren’t portable so they aren’t typically requested by other parties or agencies. In addition, some companies may have workers in multiple states. Companies must report and file state payroll returns with each state it has workers in. In this instance a company would have more than one state tax ID, making it an unreliable identifier for anything but state-specific filings.

If you’re ever prompted to enter a state tax ID number or EIN, it’s important to do so – even if you don’t think you need to. If you file your income tax return electronically, for example, you’ll be asked to enter your W-2 information using the same numeric figures and identification numbers for your employer. This allows the IRS to match information you provide about your income and withholding with information provided by your employer. The IRS also sends this information to the state reported on your W-2 so it can match your data as well.

Registering a Business

Many states require you to register a business that is doing business in their state, even if your business is based in or incorporated in another jurisdiction. States may issue you tax ID numbers or various other identification numbers when you do so.

Some local jurisdictions may also require you to register before doing business or to get local tax accounts set up for local income, sales, property or other tax. Of course, you may also need to get licenses or permits depending on the nature of your business.

2018 Tax Law Changes

The 2018 tax law changes don't directly affect EINs or state business identifiers. Still, you should make sure you understand how the tax law changes affect your business, including business income tax and tax on your employees and other stakeholders.

2017 Tax Law

Employer ID numbers issued before 2018 aren't affected by the tax law changes.

References

  • IRS: Employee ID Numbers
  • Minnesota: Starting a Business
  • Small Business Administration: Get Federal and State Tax ID Numbers
  • Small Business Administration: Register Your Business

Writer Bio

With a background in taxation and financial consulting, Alia Nikolakopulos has over a decade of experience resolving tax and finance issues. She is an IRS Enrolled Agent and has been a writer for these topics since 2010. Nikolakopulos is pursuing Bachelor of Science in accounting at the Metropolitan State University of Denver.

Is EIN the same as a Tax ID? An employer ID number (EIN), used by businesses for tax purposes, is just one type of tax ID number (TIN) that can be assigned by the Internal Revenue Service (IRS) for federal income tax purposes.

What is a Tax ID Number?

A tax ID number is a generic term for a nine-digit identification number that the Internal Revenue Service uses to identify and track payments to individuals and businesses for federal income tax purposes. This number is entered on a tax return when reporting income.

Some types of tax ID numbers include:

  • Employer ID Number: A tax identification number for most businesses.
  • Social Security Numbers (SSNs): The most common identifier for individuals.
  • Individual Taxpayer Identification Numbers (ITINs): Used for individuals who are not eligible for a Social Security Number or an Employer ID Number, such as non-U.S. residents and resident aliens who cannot obtain a SSN.

What is an Employer ID Number?

An employer ID number is needed for most businesses to file federal income taxes. The IRS uses the EIN to identify those businesses with certain tax obligations, such as limited liability companies (LLC), partnerships and corporations.

All businesses with employees must get an EIN through the IRS. There are several other factors that determine whether a business needs an EIN, including:

  • Open an account requiring an EIN for banking or a line of credit
  • Purchase or inheritance of a business by a new owner who will be running it as sole proprietor
  • Change in the ownership of a business, such as sole proprietorship, partnership, or corporation
  • Form or create a trust, pension plan, corporation, partnership, or LLC
  • Represent an estate that takes over a business following the death of a sole proprietor

Businesses without employees, such as sole-owner LLCs who do not file pension or excise tax returns, are not required to obtain an EIN. These single-member businesses can simply use the owner's Social Security Number to file a tax return.

Depending where the business is located, a state-based EIN might be needed to file state income taxes. This number is different from the one used for federal income tax. For a person discussing state and federal EINs, a federal employer ID number (FEIN) is simply another way of describing the EIN used for filing federal income tax returns as described in this article.

What Is the Difference Between a TIN and an EIN?

The tax ID number and the employee ID number are similar, but their differences include:

  • An EIN is one of several types of tax ID numbers.
  • An EIN is assigned to businesses only, not individuals.

Getting a Tax ID Number

Online submission is the fastest and preferred way to request a tax ID number. This service is available for all businesses whose main office or legal residence is within the U.S.

If submitted online during business hours, you will typically receive your tax ID number within one business day. If you are unable to submit the request online, you can also:

  • Call the toll-free number 1-800-829-4933
  • Download the IRS Form SS-4 and mail or fax it to the IRS
  • Complete the form directly on the IRS website

Frequently Asked Questions

Do I need an employer ID number?

An EIN is required for a business that:

  • Has employees
  • Opens an account that requires an EIN for banking or a line of credit
  • Is purchased or inherited by someone who will be running it as a sole proprietor
  • Makes a change in ownership, such as sole proprietorship, partnership, or corporation
  • Forms or creates a trust, pension plan, corporation, partnership, or LLC
  • Is represented by an estate that takes over a business following the death of a sole proprietor.

Are there different methods for registering for an EIN?

Yes. The fastest and most preferred method to apply for a new EIN number is online, but you can also apply on the phone, via fax, and through the mail.

If you need help with tax ID numbers or employer ID numbers, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

What is California state ID number?

State ID number California refers to the number that will be assigned to your company in California to identify your company for tax purposes in the state.

How do I look up my Minnesota tax ID number?

Find Your Minnesota Tax ID Numbers and Rates.
You can find your Withholding Account ID online or on any notice you have received from the Department of Revenue..
If you're unable to locate this, contact the agency at (651) 282-9999..