An EIN for freelancers is usually optional. If you work alone as a sole proprietor, with no employees, you can use your Social Security number for everything. Even so, most freelancers get one anyway, because it’s free, takes about 15 minutes online and keeps your SSN off client paperwork.
You do need an EIN, however, once you hire employees, form a multi-member LLC or elect S corp status. In those cases, there is no way around it.
What an EIN is
An Employer Identification Number (EIN) is a nine-digit tax ID that the IRS gives to businesses. It looks like this: 12-3456789. Think of it as a Social Security number for your business.
Despite the name, you don’t need employees to get one. Sole proprietors, LLCs and corporations can all apply. Also, an EIN never expires, and it stays with your business for life.
When freelancers must have an EIN
The IRS lists the cases on its Do you need an EIN? page. For freelancers, these are the ones that matter:
- Employees. Even one part-time employee means you need an EIN for payroll.
- A multi-member LLC or partnership. Any business with two or more owners needs one.
- A corporation. This includes an LLC that you elect to tax as a corporation.
- Certain tax returns. Employment and excise tax returns require an EIN.
- A Keogh plan. Some older retirement plans for the self-employed require one.
On the other hand, a single-member LLC with no employees doesn’t strictly need an EIN for federal taxes. If you’re still deciding on a structure, read our guide on LLC vs sole proprietor. Likewise, if you’re thinking about payroll, see when to become an S corp, because the S corp route always requires an EIN.
Why many freelancers get an EIN anyway
Keep your Social Security number private
This is the biggest reason. Every new client asks for a Form W-9, and without an EIN, that form carries your SSN. So your SSN ends up in dozens of inboxes and accounting systems. With an EIN, you share a business number instead, which protects you from identity theft.
Open a business bank account
Most banks ask for an EIN to open a business account, especially for an LLC. A separate account makes bookkeeping easier and, for an LLC, helps protect your liability shield.
Look more professional to clients
An EIN signals that you run a real business. Some larger clients and platforms even expect one before they pay you.
Open a Solo 401(k)
Many Solo 401(k) providers ask for an EIN when you open the plan. Therefore, if you plan to save for retirement this way, getting an EIN early saves a step later.
How freelancers get an EIN for free
Before you start
You apply through the IRS EIN application on IRS.gov. It’s completely free, and you get your number as soon as you finish. To qualify, you need a Social Security number or ITIN, and your business must be based in the U.S.
Keep in mind that you must finish in one session. The application can’t be saved, and it times out after 15 minutes without activity. Also, the IRS issues only one EIN per person per day.
Step-by-step application
- Open the online application on IRS.gov and click “Apply Online Now.”
- Choose your business type. Pick “Sole proprietor” or “Limited liability company,” depending on your setup.
- Give a reason. For most freelancers, the answer is “Started a new business.”
- Enter your details. Add your name, SSN, business address and the date you started.
- Describe your work. Choose the industry that fits best, and answer “no” to employees if you have none.
- Pick online delivery. Then download your confirmation letter, called a CP 575, right away.
- Save it safely. Banks and clients may ask for that letter later.
IRS online hours
The online tool doesn’t run around the clock. These are its hours, in Eastern time:
- Monday to Friday: 6 a.m. to 1 a.m. the next day
- Saturday: 6 a.m. to 9 p.m.
- Sunday: 6 p.m. to midnight
Other ways to apply
If the online tool doesn’t work for you, there are two slower options. First, you can fax Form SS-4, and you’ll generally get your EIN within four business days. Second, you can mail the form, which takes about four weeks. Phone applications, in contrast, are only available to international applicants.
Avoid sites that charge freelancers for an EIN
Many websites look official and charge $50 to $300 for an EIN. In reality, they just fill out the same free IRS form for you. The IRS itself warns that you never have to pay a fee for an EIN. So always check that the address ends in irs.gov before you type your SSN.
How freelancers use an EIN
Once you have your number, put it to work in three places:
- Form W-9. As a sole proprietor, you can enter either your SSN or your EIN. Use the EIN for every new client. With a single-member LLC, the form asks for the owner’s SSN or EIN, not the LLC’s.
- Your tax return. Enter it on line D of Schedule C. Your Form 1040 still uses your SSN.
- Your bank. Use it to open your business checking account.
Clients then report what they paid you under your EIN. For more on those forms, see our guide on 1099-NEC vs 1099-K.
Frequently asked questions
Does an EIN change how freelancers pay taxes?
No. An EIN is just an ID number. As a sole proprietor or single-member LLC, you still file Schedule C and pay self-employment tax exactly as before.
Can I get an EIN as a sole proprietor without an LLC?
Yes. Choose “Sole proprietor” in the online application. You don’t need to register anything with your state first.
What if I lose my EIN?
First, look at your CP 575 confirmation letter, old tax returns or bank documents. If you still can’t find it, call the IRS Business and Specialty Tax Line at 800-829-4933.
Do I need a new EIN if I form an LLC?
Usually, yes. The EIN from your sole proprietorship belongs to you, not to the new LLC. So if the LLC needs its own EIN, for example for a bank account, apply for a new one under the LLC’s name.
Do freelancers need an EIN number?
Not always. If you’re a sole proprietor with no employees, you can use your Social Security number. Still, a free EIN keeps your SSN off W-9 forms, and most business banks ask for one. You’ll need it if you hire employees, form a multi-member LLC or elect S corp status.
This article is for general information only and is not tax or legal advice. Check IRS.gov or a tax professional for your situation.