What is an FEIN?

An FEIN, or Federal Employer Identification Number, is a unique nine-digit number the IRS assigns to identify your business for tax purposes, working much like a Social Security Number does for an individual. It is free to obtain, permanent once issued, and required for any business that pays wages to employees.

You will also see it called an EIN, a federal tax ID, or a federal identification number. They all mean the same thing. Here is who needs one, how to get it, and what to do when your business changes.

Key Takeaways from this Article

• An FEIN is a nine-digit IRS number that identifies your business, and FEIN, EIN, and federal tax ID all refer to the same number.
• Any business that pays wages needs one, along with corporations, partnerships, and multi-member LLCs, whether or not they have employees.
• Applying is free and takes minutes online. Any site charging a fee for it is reselling a free government service.
• Your FEIN is permanent and does not change when you move or rename the business, but a change in ownership structure usually requires a new one.
• In Maine, a federal FEIN is only half of what you need. State employer accounts are separate registrations.

What is a Federal Employer Identification Number (FEIN)?

A Federal Employer Identification Number is a nine-digit number issued by the IRS to identify a business entity for tax purposes. It functions for your company the way a Social Security Number functions for a person, and it stays with the business permanently once assigned.

The IRS uses your FEIN to track business income taxes, employment taxes, and other financial activity tied to your business. You will use it when you file payroll reports, open a business bank account, or apply for licenses and loans.

On the question of FEIN versus tax ID: an FEIN is a type of tax ID, specifically the one used by business entities. Individuals use a Social Security Number or an ITIN instead.

Who Needs an FEIN?

Not every business needs one, but most do. You need an FEIN if your business:

• Has employees, or plans to hire any
• Operates as a corporation, partnership, or multi-member LLC
• Pays excise taxes, or taxes on alcohol, tobacco, or firearms
• Offers a Keogh plan, a type of retirement plan for self-employed individuals
• Withholds taxes on non-wage income paid to non-resident aliens
• Is a trust, estate, nonprofit, farmers' cooperative, or similar entity

Sole proprietors and single-member LLCs are usually not required to have one, but many get an FEIN anyway. It keeps personal and business finances cleanly separated, and most banks will ask for it when you open a business account or apply for financing.

Is an FEIN Required for Payroll?

Yes. If you pay wages to employees, you need an FEIN to report and deposit payroll taxes with the IRS. It appears on every W-2 you issue, on your quarterly Form 941, and on your annual unemployment return, Form 940.

Your federal number is only part of the picture, though. Most states, Maine included, require separate state employer accounts before you can legally run payroll there, and those are registered independently of your FEIN. If you are setting up payroll for the first time, plan on both.

How Do You Apply for an FEIN?

Applying is free and, online, takes about fifteen minutes. The IRS warns explicitly about third-party sites that charge for this, so if you are being asked to pay, you are on the wrong page.

One constraint worth knowing before you start: the IRS issues only one EIN per responsible party per day, regardless of which method you use.

Online

The fastest route is the IRS's online EIN application. You will need the legal name of your business, your business structure and state of registration, the responsible party's SSN or ITIN, your business address, and your reason for applying.

The IRS issues the number immediately when you submit. Complete it in one sitting, though, because the session times out after fifteen minutes of inactivity and you will start over.

By Fax or Mail

You can also file Form SS-4 by fax or mail. Fax takes roughly four business days. Mail takes roughly four weeks.

By Phone

Businesses based outside the United States can apply by phone. That option is not available to domestic applicants.

When Do You Need a New FEIN?

Less often than people expect. Moving your office or changing your business name does not require a new number. What does:

• Your ownership structure changes, such as a sole proprietorship incorporating
• You bring on new partners
• A merger creates a new legal entity
• A bankruptcy reorganizes the business

The common thread is that a new legal entity needs a new number, while the same entity in new clothes does not. If you are unsure which side of that line a change falls on, ask your accountant before you apply, because having two active FEINs creates its own filing problems.

How Can Paper Trails Help?

Getting an FEIN is the easy part. What follows it is less obvious: registering your Maine state employer accounts, setting up withholding correctly, and making sure the number lands on every form it belongs on before your first payroll runs.

At Paper Trails, we set up payroll and tax for new Maine and New England businesses regularly, including the state registrations that a federal number alone will not cover. Our team is in Kennebunk, and you can see what payroll costs on our pricing page.

Updated: September 2026

Written by: Jon Portanova