An Employer Identification Number (EIN) is a federal tax ID assigned by the IRS. Businesses commonly use it for federal tax administration, banking, payroll, licensing, and business credit.
Cost: $0. The IRS issues EINs for free. You do not need to pay a third party simply to obtain one.
The IRS currently states that eligible applicants can obtain an EIN directly online in minutes.
Do you need an EIN?
The IRS lists several situations where a business may need one, including hiring employees, operating as a corporation or partnership, filing certain federal tax returns, and common banking or licensing needs.
A sole proprietor with no employees can sometimes use an SSN for certain purposes, but many owners still find an EIN useful for banking and business administration. Follow the IRS eligibility rules for your structure.
Before you apply
Have the following ready:
- exact legal business name
- DBA/trade name if different
- legal structure
- date the business started or entity was formed
- principal mailing/business address
- responsible party's legal name
- responsible party's taxpayer identification number when required
- reason for applying
- expected employee information if applicable
- clear description of the business activity
Form the entity first
If you decided to create an LLC or corporation, form that entity with the state before applying for the EIN. That reduces the risk of creating the federal record under the wrong legal name.
What is the “responsible party”?
The IRS defines the responsible party as the person who owns, controls, or exercises effective control over the entity and its funds/assets.
For most small Home Watch companies, this will be the actual owner or principal — not a filing-service employee or nominee.
The IRS specifically says nominees are not authorized to apply as the responsible party.
Step 1: Start at IRS.gov
Use the official IRS EIN page:
https://www.irs.gov/businesses/employer-identification-number
Do not assume the first sponsored search result is the IRS.
A government IRS page uses the irs.gov domain.
Step 2: Confirm eligibility and application method
Follow the IRS instructions for the current application method available to your business.
The online process is typically the simplest for an eligible U.S.-based applicant. The IRS also describes alternate methods for applicants that cannot use the online process.
Step 3: Choose the correct entity type
Use the structure you actually created.
Examples:
- sole proprietor
- partnership
- corporation
- limited liability company
Do not select a tax classification merely because you hope to elect it later. Answer the IRS questions based on the entity and tax facts that apply now.
Step 4: Enter the responsible party
Enter the owner/principal the IRS should recognize as responsible for the business.
Double-check spelling and taxpayer ID information. This is not the place to enter your registered-agent company simply because that company helped form the LLC.
Step 5: Enter the legal business information
Use the exact legal name from the formation document.
If the brand name differs, provide the trade/DBA name where the application asks for it.
Be consistent across:
- state formation record
- EIN record
- bank account
- insurance
- client contract
- invoices
Step 6: Describe the activity accurately
The IRS application may ask questions about the business's principal activity.
There may not be a perfect “Home Watch” label. Use the closest truthful category presented by the current form and describe the activity plainly where free-form description is available.
A useful description is:
Residential Home Watch and property-monitoring services for temporarily unoccupied homes.
Do not describe the business as construction, security, property management, or home inspection unless you actually perform that activity.
Step 7: Review before submitting
Verify:
- legal name
- address
- structure
- responsible party
- formation/start date
- activity
Correcting preventable EIN mistakes later creates unnecessary administrative work.
Step 8: Save the confirmation
Do not close the browser and assume you can easily retrieve everything later.
Save the EIN confirmation/notice in at least two secure locations.
The IRS currently notes that eligible Business Tax Account users may also be able to download a digital CP575 EIN verification notice.
What to do after receiving the EIN
Use the EIN where appropriately required for:
- business bank account
- payroll/employment tax accounts
- tax filings
- business licenses that ask for it
- insurance/business applications
- vendor tax forms when appropriate
Treat it as sensitive business information. It is not a marketing identifier to publish casually on your website.
Do not apply repeatedly because you lost the number
If the EIN already exists, follow the IRS process to confirm or recover it rather than creating another number for the same entity without a valid reason.
The IRS provides EIN confirmation options, including transcript and verification-notice methods.
What about BOI reporting?
Do not follow old 2024-era checklists blindly.
FinCEN's 2026 final rule changed federal Beneficial Ownership Information reporting requirements. As of this guide's verification date, U.S.-created domestic entities are exempt from BOI reporting under the current rule; certain foreign entities registered to do business in the United States remain subject to the revised framework.
Because this has changed multiple times, verify the current FinCEN guidance whenever you see a BOI requirement in an older startup article.
Common EIN mistakes
- paying a third party because you thought the EIN itself had a government fee
- applying before the LLC/corporation is formed
- entering a nominee instead of the true responsible party
- misspelling the legal entity name
- using a business activity that inaccurately implies regulated services
- failing to save the confirmation notice
How to know this step is complete
You should have:
- your EIN,
- the IRS confirmation stored securely,
- the legal business name matching your formation record,
- and the number ready for the bank and other legitimate business uses.
Next step
Open a dedicated business bank account →
Sources
- IRS Employer Identification Number: https://www.irs.gov/businesses/employer-identification-number
- IRS Responsible parties and nominees: https://www.irs.gov/businesses/small-businesses-self-employed/responsible-parties-and-nominees
- FinCEN BOI FAQs: https://www.fincen.gov/boi-faqs
Finish this step
Ready to move forward?
Mark this guide complete when you have finished the action and saved the records you need.