How to Obtain Your Nonprofit Employer Identification Number
The first thing to do after you complete your nonprofit incorporation is to apply to the IRS for an Employer Identification Number, or EIN. Even if you don’t plan to hire employees anytime soon, you need this number for your application for tax exemption and for all your state and federal reports. The EIN is a little like a Social Security number for organizations.
Getting an EIN is easy and free. Submit IRS Form SS-4, which you can download and print from the IRS website. You also can complete the online application or apply by telephone. As IRS forms go, this one is simple and straightforward and only one page long.
If you do apply by phone or complete the online application, it’s a good idea to download Form SS-4 beforehand to get an idea of the questions you’ll be expected to answer.
Choose only one method to apply for your EIN. Don’t send in IRS Form SS-4 AND apply by telephone. You may end up with two EINs, a confusing situation for everyone.
The name of the applicant isn’t your name; it’s the name of your new organization. As with the incorporation papers, you need to identify an individual as the principal officer and include his Social Security number on the form. Here are some of the other items you need to fill out, line by line:
Line 9: If your organization is a church or church-controlled organization, check that box in section 9a. If it’s not, check the Other Nonprofit Organization box. Specify what sort of nonprofit organization you are. In most cases, charitable is sufficient. In 9b you’re asked in which state your organization is incorporated.
Line 10: Most likely, your reason for applying for an EIN in Line 10 is started a new business.
Line 11: In Line 11, the date on your incorporation papers is the date the business was started.
Line 12: This line asks for the closing month of your organization’s accounting (fiscal) year.
Lines 13 and 14: These lines relate to the number of employees you intend to hire and your expected payroll tax liabilities over the coming 12 months. You can enter 0 and No if your organization doesn’t plan to hire staff in the year ahead.
If you do intend to hire people for whom you’ll have to pay payroll taxes, you’ll need to check IRS withholding tables and estimate the amount of payroll taxes that will be due to the IRS.
Line 16: This line asks you to check the box that describes your organization’s principal activity. You can check Other here. Be a little more specific when describing your activities in the blank space. You may say Charitable — Arts, for example.
The IRS estimates that you’ll receive your EIN in four to five weeks if you apply by mail. You’ll receive your EIN immediately if you choose the online application option.
You can apply for an EIN by telephone by calling the IRS Business and Specialty Tax Line at 800-829-4933. The person named as the principal officer on the form must make the call. Be sure that you have completed the SS-4 Form before you call.
An IRS worker takes your information over the phone and assigns an EIN to your organization. You must fax or mail the form to the appropriate IRS office within 24 hours of making the call.
Even if your organization is an unincorporated association or a trust, you still need an EIN number if you plan to apply for a charitable tax exemption.