State and Federal Employer Identification Numbers
The employer identification number is the method by which businesses transmit tax information to the State and Federal Governments. The FEIN is issued by the Internal Revenue Service (IRS). Your State’s Department of Revenue may use the same number of issue a similar state number. Businesses generally obtain an EIN at time of filing for business entity status in the state; however, businesses without employees may file taxes under the business owner’s social security number. The EIN becomes mandatory when the business acquires employees (or independent contractors) and is required to withhold payroll taxes on those individuals.
Note: Obtaining a business EIN is also important for Establishing Business Credit.