EIN or Employer Identification Number is another name for Federal Tax Identification Number used so that a business entity may be identified. The Internal Revenue Service (IRS) offers free online application forms to apply for an EIN number.

FEIN or Federal Employer Identification Number is also known as Federal Tax Identification Number. This 9 digit code is used by businesses in order to classify and identify them as a tax payer, for banking services and other official and legal purposes. Businesses with no employees and sole proprietorship may use the Social Security number for tax reporting. But for companies with employees must have FEIN or Federal Employer Identification Number. For each business owned by the same person, a different FEIN number would be required. It is unique to a business just like Social Security number is unique to an individual.

Following are a few situations when FEIN is required:

• For starting a new business which is not a sole proprietorship
• Purchase of an ongoing business
• Any change in the organization type
• When hiring employees for the first time
• To create a pension plan in office
• To form a trust

Although an application for FEIN may take weeks to get processed, it is actually very easy to apply for FEIN.

You may collect an SS-4 Form from the office of IRS or the Social Security Office, fill it out and send it to the office of IRS. There is no application fee. Make sure you send it through registered post to guarantee the safe delivery of your form. You can download PDF version of IRS SS-4 form from here.

IRS has launched their interview style application for FEIN where they ask you certain questions online and update their system based on the information that you provide them. There is no form to fill out and there is no lengthy process of waiting for the FEIN number either. If you are using their system of interview style application:

• You don't need to fill out an SS-4 form and send it to the IRS office anymore
• You don't have to get into the lengthy process of application for FEIN
• You must answer the online questionnaire provided by them
• IRS will then validate the data that you have provided
• You will receive your EIN number immediately after successful verification

IRS allows you to make an online application.

Before the year 2001 the first 2 digits of an FEIN suggested that the business was located in a particular area. EIN assignment got centralized in the year 2001 and since then prefixes no longer had as much importance as before. There are 10 campuses that can assign the FEIN if required. Currently the FEIN prefix only indicates the campus that assigned the number. This means that each of the 10 campuses has certain usable prefixes.

Federal Employer Identification Number works best with businesses and not with purchasing insurance. Insurance companies prefer your Social Security Number rather than your Federal Employer Identification Number.

FEIN is used by employers, partnerships, sole proprietors, non-profit organizations, trusts, corporations, estates, government agencies and other business entities. Employers may choose to use either their Social Security Number (SSN) or their FEIN for reporting taxes withheld on behalf of their employees. However, the credit bureaus and credit issuers can tell between SSN and FEIN.