What is an EIN?

Last updated May 2026 · Reviewed by David Chen
Quick Answer

An EIN (Employer Identification Number) is a 9-digit federal tax ID issued by the IRS for businesses. Free to obtain at irs.gov. Required for: opening business bank accounts, hiring employees, filing business taxes, applying for business loans, building business credit. Sole proprietors can use SSN but EIN is recommended.

Key Details

  • 9-digit federal tax ID
  • Free at irs.gov (apply online)
  • Required for business bank accounts
  • Required for hiring employees
  • Required for business credit building
  • Sole proprietors: optional but recommended
Answer by David Chen — Senior Business Funding Editor
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