What Is a Federal ID Number?
A Federal ID Number, also known as a Federal Tax Identification Number or Federal Employer ID Number, is a unique nine-digit identifier issued by the IRS in the format XX‑XXXXXXX. It functions as a business equivalent of an individual’s Social Security Number, used for tax and payroll purposes.
Federal ID Number vs. EIN vs. TIN
- A Federal ID Number is identical to an Employer Identification Number (EIN). The terms are interchangeable.
- A Taxpayer Identification Number (TIN) is a broader term that includes SSNs, EINs, ITINs, and other IRS-issued identifiers—but EIN refers specifically to business entities. Why Businesses Need a Federal ID Number
A Federal ID Number (EIN) is required for:
- Filing business and employment tax returns
- Opening business bank and merchant accounts
- Applying for loans, grants, or business licenses
- Hiring employees or filing certain IRS return types.
Even sole proprietorships without employees may need an EIN to separate business activities from personal finances.
How to Get a Federal ID Number
You can obtain an EIN for free directly from the IRS via:
- Online application — immediate issuance upon completion
- Fax or mail, using IRS Form SS-4 — typically takes a week by fax or several weeks by mail
- Phone — for international applicants only.
If your business changes its responsible party or mailing address, you must notify the IRS within 60 days using Form 8822-B—or risk compliance issues.
Key Employer Considerations
- Permanent identifier: EINs are never reused or reassigned, even if the business closes or changes form.
- Secure usage: Though not considered as sensitive as SSNs, EINs should still be protected, as misuse can lead to identity theft or fraud.
