How to Apply for a Tax ID (EIN) Number for a Non-Profit Organization
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Applying for a tax ID number, also known as an employer identification number (EIN) , is a simple process that can be completed online, by fax, or by mail. But the easiest method is always going to be to send in a form online, usually through a third-party EIN company.
Let’s take a look at why a non-profit organization might need an EIN and how they can get one.
What is a Non-Profit Organization?
A non-profit organization is defined as a company that uses its surplus revenue to achieve its goals, rather than distributing it among shareholders. Non-profits can be religious, charitable, educational, scientific, or literary in nature. They can also be political organizations or sports clubs.
Why Does a Non-Profit Organization Need an EIN?
There are a few reasons why a non-profit might need an EIN. The most common reason is to open a business bank account. Many banks will require an EIN in order to open up an account for your organization.
An EIN is also required if you have employees. You’ll need to withhold taxes from their paychecks and file quarterly tax forms. An EIN is also needed to apply for a business license or permit.
EINs may also be needed to purchase goods tax-free. Many vendors who sell to non-profits will require an EIN in order to extend the tax exemption.
How to Apply for an EIN
As we mentioned earlier, the easiest way to apply for an EIN is online. You can also apply by fax or mail, but the online method is going to be the quickest.
Here’s the step-by-step process:
- Gather the required information. You’ll need the name and address of your organization, as well as the names and Social Security numbers of your principal officers.
- Choose an EIN company. There are a few different companies that can help you obtain an EIN.
- Complete the online application. This will usually involve filling out a short form with your organization’s information.
- Receive your EIN. Once your application has been processed, you’ll receive your EIN via email. Make sure to keep this in a safe place, as you’ll need it for tax purposes.
Applying for a tax ID number should only take minutes and you should receive your EIN within a few hours.
What Happens If Your EIN is Rejected?
If you apply for an EIN and your application is rejected, don’t worry. This happens from time to time. The most common reason for rejection is that the Social Security number of one of your principal officers is entered incorrectly.
If you do receive a rejection, simply resubmit your application with the correct information. You should receive your EIN within a few hours.
This is another reason why it’s best to do this online. If you do it online, you’ll be able to reapply within minutes. If you do it through fax or mail, you may not even know that your EIN has been rejected until much later.
Do You Need an EIN Even If You Aren’t For-Profit?
If you’re not sure whether your organization needs an EIN, the safest bet is to apply for one. It’s a simple process and it’s free. Even if you don’t need an EIN right now, it’s better to have one on hand in case you need it in the future.
EINs are not just for for-profit enterprises, they’re also for a host of other things, such as filing taxes, opening bank accounts, and hiring employees.
Do You Need an EIN Even If You Don’t Have Employees?
If you don’t have any employees, you may not need an EIN. However, there are certain situations where you might still need one.
For example, if you’re going to open a business bank account, the bank will probably require an EIN.
An EIN is a lot like a social security number for a business. So, if your non-profit organization ever needs a credit check or to take out loans, you’ll still need an EIN.
Can You Get an EIN Later?
You can apply for an EIN at any time. However, if you’re already running your non-profit organization without one, you can wait until you actually need it. While there’s no harm in not having an EIN, there could be harm introduced if you find that you need one and need to wait to get one. For instance, if you need to get a loan but find out that you have to apply for an EIN first.
It doesn’t cost anything to maintain your EIN. You apply for the EIN once and it’s yours forever, as long as your entity exists and remains active. So, there’s no real reason not to get an EIN as early as possible, even if you don’t know whether you’ll need it.
Are There Limits on EINs?
No, there are no limits on the number of EINs that a single organization can have. However, each EIN can only be used for one account. So if you have multiple businesses, you’ll need to get an EIN for each one.
The only potential limit to an EIN is the fact that you will need to wait between getting multiple EINs if you need to get a lot of them in one day. You can only have a few EINs assigned to you each day if you’re acting as a representative on each form.
Conclusion: Get Your EIN Right Away
As a non-profit organization, you should get your EIN soon after creating your entity. This will make it much easier to open a bank account and apply for licenses and permits. Start applying by filling out an application online today.