How to get an EIN for a nonprofit

An employer identification number, or EIN, is the nine-digit number the IRS uses to identify your organization, much as a Social Security number identifies a person. The name is misleading: you need one whether or not you ever hire anyone. Publication 557 says every exempt organization must have its own EIN, and both Form 1023 and Form 1023-EZ require it before you can submit.

Getting an EIN is usually quick. Getting it at the right time, under the right name and with the right responsible party is what matters.

Incorporate first, then apply

The IRS is direct about this: do not apply for an EIN until your organization is legally formed. For a nonprofit corporation, that means after the state has filed your articles of incorporation.

The reason is practical. When you apply, the IRS presumes you are legally formed, and the clock starts on the three-year period after which an organization that has not filed required annual returns or notices loses its exemption automatically. An EIN obtained months before incorporation, for a group that never formed or formed later, can create filing expectations and mismatched records that are tedious to untangle. See automatic revocation and reinstatement for what is at stake.

The full order of steps is in how to start a nonprofit: articles, bylaws, organizational meeting, then the EIN.

Three ways to apply

The IRS no longer issues EINs by telephone to domestic applicants; telephone applications are only for international applicants. Online, the principal officer must have a valid taxpayer identification number, such as a Social Security number or individual taxpayer identification number. You can view, print and save the EIN assignment notice at the end of the online session, and you should, because that notice is what banks ask to see.

One per day. The IRS limits EIN issuance to one per responsible party per day, whatever the method.

Filling in the key lines

The online application asks the same questions as Form SS-4. The lines that matter most for a nonprofit:

Line 1, legal name. Enter the name exactly as it appears in your filed articles, including any suffix such as "Inc." Do not use abbreviations. A mismatch between your EIN record and your articles causes problems later on Form 1023 and with banks.

Line 2, trade name. Only if you operate under a "doing business as" name that differs from the legal name.

Lines 7a and 7b, responsible party. Enter the name and Social Security number or ITIN of the responsible party (more below).

Line 9a, type of entity. A nonprofit corporation that is not a church checks "Other nonprofit organization" and specifies the type, for example "educational organization." Do not check the plain "Corporation" box, which asks for the income tax return the entity will file. Online, choose the option for a church, church-controlled organization or other nonprofit organization.

Line 10, reason for applying. Check only one box. A newly formed organization typically checks "Started new business" and describes its activity.

Line 11, date started. For a new nonprofit corporation, the date the state filed your articles is the natural starting date.

Line 12, closing month of accounting year. Enter the last month of your fiscal year. Use the same month your bylaws and Form 1023 will show.

The responsible party

The responsible party is the person who ultimately owns or controls the entity, or who exercises ultimate effective control over its funds and assets. For tax-exempt organizations, the SS-4 instructions say it is generally the same as the "principal officer" as defined in the Form 990 instructions, typically the president, chair or executive director.

It must be an individual, not another organization, unless you are a government entity. A fiscal sponsor, a law office or an accounting business cannot be the responsible party.

Keep it current. Any entity with an EIN must report a change in its responsible party on Form 8822-B within 60 days.

Common errors

Applying before incorporation. Covered above. If it has happened, sort it out before filing your exemption application so the EIN record matches the organization in your articles.

Applying as an individual. A founder who completes the application as a sole proprietor gets an EIN for themselves, not for the nonprofit. The organization needs its own.

Using someone else's EIN. The Form 1023 instructions are explicit: do not use the EIN of a related or other organization. A project that operated under a fiscal sponsor's EIN still needs its own once it incorporates.

Applying twice. Do not apply for an EIN more than once. If you are unsure whether the organization already has one, check your records and the board's files, and contact the IRS before applying again.

The wrong entity type or fiscal year. Checking "Corporation" instead of "Other nonprofit organization," or entering a closing month that differs from your bylaws, leads to IRS notices about returns you do not owe or filing dates that do not match.

An EIN does not make you tax-exempt

This is the most common misunderstanding. An EIN is an account number. It says nothing about whether your income is exempt or whether donations are deductible.

• Federal exemption comes from an approved Form 1023 or Form 1023-EZ, or, for churches and organizations with gross receipts normally not more than $5,000, from the statute itself. The Form 1023 vs. 1023-EZ guide helps you choose.
• State exemption is separate again. The IRS notes that an EIN is not the same as a state tax-exempt number, which a state agency issues. See state tax exemption.

501Nonprofit.com is a private company, not the IRS. This page is general information, not legal or tax advice for your organization. Example organizations and figures are hypothetical.