How to Get a Tax ID Number: EIN, State Tax IDs, and Compliance Steps

A tax ID number is one of the first administrative items many founders need after choosing a business structure. In the U.S., the term can refer to several identifiers, but most business owners are really looking for an Employer Identification Number (EIN) or a state tax account number.

Understanding the difference matters. The right tax ID helps you open a business bank account, hire employees, register for payroll and sales tax, and keep your company’s records aligned with federal and state requirements.

This guide explains what a tax ID number is, when you need one, how to apply for an EIN, how state tax IDs work, and what to do after your number is issued.

What Is a Tax ID Number?

Tax ID number is a broad term for an identification number used by the IRS or a state tax authority to track tax obligations. Depending on the context, it may mean one of the following:

• Social Security Number (SSN) for most U.S. individuals
• Individual Taxpayer Identification Number (ITIN) for certain individuals who are not eligible for an SSN
• Employer Identification Number (EIN) for businesses and other entities
• State tax account number for taxes administered by a state revenue department

For business owners, the most common federal tax ID is the EIN. It is issued by the IRS and is used to identify a business for federal tax purposes.

Which Tax ID Number Do You Need?

The number you need depends on who you are and how you operate.

For individuals

If you are filing personal taxes, your SSN is usually your primary tax ID. If you are not eligible for an SSN but still need to file or report certain U.S. tax obligations, you may need an ITIN.

For businesses

If you are starting an LLC, corporation, partnership, or nonprofit, an EIN is often necessary. Even many sole proprietors obtain one to keep their business finances separate from their personal identity.

For state tax purposes

If your company collects sales tax, withholds payroll taxes, or pays state-level business taxes, you may also need a state tax ID number. This is issued separately by the state, not by the IRS.

When You Need an EIN

An EIN is not required for every business, but many businesses should get one early. Common reasons include:

• Forming a corporation or multi-member LLC
• Hiring employees
• Opening a business bank account
• Filing partnership or corporate tax returns
• Applying for certain business licenses or permits
• Registering for state payroll or sales tax accounts
• Building a clearer separation between business and personal finances

Even if your business could legally operate without an EIN, getting one is often a smart administrative step.

How to Get a Federal Tax ID Number in 3 Steps

For most businesses, getting a federal tax ID number means applying for an EIN with the IRS.

Step 1: Confirm that your business is ready

Before you apply, make sure you know your business structure and legal name. The IRS will also ask for a responsible party, which is the person who controls or manages the entity.

You should also know:

• The business mailing address
• The type of entity you formed
• The reason you are applying for an EIN
• The date your business was started or acquired
• Whether you expect to hire employees
• The main industry or activity of the business

If your company has not yet been formed, you may want to complete formation first so the information on your application matches your company records.

Step 2: Gather the information the IRS will request

The EIN application asks for basic but important details. Have the following ready before you begin:

• Legal name of the business
• Trade name, if any
• Entity type
• Responsible party name and taxpayer identification number
• Principal business address
• County and state where the business is located
• Number of employees you expect to hire
• Reason for applying, such as starting a new business or hiring workers

Accuracy matters. Even small mismatches between your formation documents and your EIN application can create delays or confusion later.

Step 3: Submit the application to the IRS

The fastest way to get an EIN is usually the IRS online application. Many applicants receive the EIN immediately after completing the process.

Other filing methods may also be available depending on the applicant’s location and situation, including fax or mail submission. International applicants may follow a different process.

After the IRS issues the EIN, save the confirmation notice in your business records. You will need it for banking, payroll, and some state registrations.

How to Get a State Tax ID Number

A state tax ID number is different from an EIN. States issue these numbers for taxes they administer directly, such as sales tax, withholding tax, unemployment insurance, or other state business taxes.

The process varies by state, but the general steps are similar.

1. Identify the tax accounts you need

Not every business needs every state tax registration. Your obligations depend on whether you:

• Sell taxable goods or services
• Hire employees in the state
• Operate in more than one state
• Own property or maintain a physical presence there

2. Register with the state tax agency

Most states allow online registration through the department of revenue or similar agency. You will usually need your EIN, business name, formation details, address, and ownership information.

3. Keep the registration details consistent

The state account should match your federal and formation records. A clean paper trail makes it easier to manage tax filings, bank onboarding, and license renewals later.

Common Mistakes to Avoid

Getting a tax ID number is usually straightforward, but a few common errors can cause avoidable delays.

Applying before your company details are settled

If your entity name, responsible party, or business address is still changing, wait until your records are stable before filing.

Confusing an EIN with a state tax ID

An EIN is a federal number issued by the IRS. A state tax ID is issued by a state agency. Many businesses need both.

Using the wrong entity information

If your EIN application does not match your formation documents, your bank or state agencies may flag the mismatch.

Assuming one filing covers everything

An EIN does not automatically register you for sales tax, payroll tax, or local licensing. Those steps are separate.

Relying on a personal SSN when a business EIN is better

Sole proprietors sometimes start with an SSN, but an EIN can help keep business and personal matters separate and may be required as the company grows.

What Happens After You Get the Number?

Receiving your tax ID number is only the beginning. After you obtain it, you should:

• Store the confirmation notice with your formation records
• Use the number when opening business bank accounts
• Share it with payroll providers and tax professionals as needed
• Register for state tax accounts if your business activities require them
• Keep all tax filings consistent with the legal entity name and EIN

If you are forming a business, this is also a good time to review other compliance items such as annual reports, licenses, registered agent services, and business banking setup.

How Zenind Can Help New Business Owners

For founders who are still building their companies, the tax ID step is easier when the formation process is organized from the beginning. Zenind helps entrepreneurs form LLCs and corporations in the U.S. with a structured workflow that supports the next steps in business compliance.

By starting with a properly formed entity, you reduce the chances of mismatched records when applying for an EIN, registering for state taxes, or opening financial accounts. That is especially useful for first-time owners who want a clear path from formation to operation.

Frequently Asked Questions

How long does it take to get a tax ID number?

An EIN can often be obtained quickly when the IRS online application is available to the applicant. State tax IDs may take longer, depending on the state and the type of registration.

Is there a fee to get an EIN?

The IRS does not charge a fee for obtaining an EIN. Be cautious of third-party services that charge unnecessary filing fees.

Can a sole proprietor get an EIN?

Yes. Sole proprietors can apply for an EIN, and many do so to separate business banking and tax records from personal information.

Do I need a tax ID number before opening a business bank account?

In many cases, yes. Banks often require an EIN for entities such as LLCs and corporations. Some sole proprietors may be able to open accounts with an SSN, but policies vary by bank.

Can a non-U.S. resident get an EIN?

Yes, non-U.S. residents can apply for an EIN if they have a business that requires one. The application process may differ from the standard online route.

Does one tax ID number cover every state?

No. An EIN is federal. If you need to register for state payroll, sales tax, or other state taxes, you may need separate state registrations.

Final Thoughts

A tax ID number is a key part of setting up a compliant business in the United States. For most business owners, the main federal step is obtaining an EIN, then adding any required state tax registrations based on how the company operates.

If you approach the process in the right order, keep your records consistent, and understand which tax accounts apply to your business, you will avoid many common filing problems and stay better prepared for growth.