Does a Partnership need a Tax ID (EIN)?

A partnership is going to need its own EIN (employer identification number). One of the primary differences between a partnership and an LLC is how they are taxed. An EIN is also used as a taxpayer identification number. Since a partnership is naturally composed of more than one entity, it cannot use the social security number, ITIN, or EIN of any of the members. Instead, it needs its own.

While a single member LLC can be treated as a partnership, a partnership cannot be a sole individual. A single member LLC, on the other hand, might be able to file under the sole member’s SSN or ITIN.

With a tax ID, a partnership will be able to hire employees, open bank accounts, and get credit cards. In fact, an EIN is one of the first things a partnership should get after it’s finished its formation documents. It can get an EIN at the same time that it files with the state; it doesn’t have to wait for one or the other. An EIN can be acquired online in as little as an hour, and there’s no downside to getting one, even if it doesn’t end up being used.


Written by Maurice Mallory