If you run a business in the US, you’re likely familiar with the importance of an Employer Identification Number (EIN). Since business documents such as licences and permits need to be regularly renewed, new business owners often wonder: does an EIN expire? With the paperwork and compliance involved in running a business, it’s easy to lose track of these administrative details.

The short answer is no, your EIN doesn’t have an expiration date. Once it’s assigned, it permanently stays with your business. In certain scenarios, however, you might need to update or apply for a new EIN, especially when making major changes to your business. Here’s what you need to know.

What’s in this article?

• What is an EIN, and why do businesses need one?
  
• Does an EIN expire?
  
• How to keep an EIN active
  
• What happens if a business loses its EIN?
  
• When might a business need a new EIN?
  
• How to update business information linked to an EIN
  

What is an EIN, and why do businesses need one?

An EIN is a unique nine-digit number issued by the Internal Revenue Service (IRS) in the US to identify a business for tax purposes, like a Social Security Number for your business. It’s used for business activities such as opening a business bank account, filing taxes, and hiring employees.

You need an EIN if you plan to form a corporation or partnership. Even if you’re a sole proprietor, an EIN can be useful for separating your personal and business finances. It’s also required if you want to set up a Keogh retirement plan or are involved with non-profit organisations.

Does an EIN expire?

No, an EIN does not expire. Once the IRS issues an EIN to your business, it’s permanent and remains associated with your business for its lifetime. Even if the business changes structure or ownership, the EIN typically stays the same unless the IRS specifically requires you to get a new one (e.g., converting from a sole proprietorship to a corporation).

How to keep an EIN active

You don’t need to do anything specific to keep your EIN active. But you must comply with IRS regulations by paying business taxes and following filing requirements.

Here are some business obligations you need to fulfil:

• File annual tax returns: Whether you’re a sole proprietor, corporation, partnership, or limited liability company (LLC), you must file federal tax returns each year. If you don’t, the IRS might flag your EIN for inactivity or non-compliance.

• Report payroll taxes: If your business has employees, you must file payroll taxes and submit the appropriate forms (such as 940 and 941) on time. Failure to do so can lead to penalties and issues with your EIN status.

• Stay current with state requirements: Some states require annual reports or franchise tax filings depending on your business structure. Filing on time keeps your business in good standing.

• Update business information: If there’s a change in business name, address, or ownership structure, notify the IRS to keep your records current. This helps prevent confusion or filing delays.

What happens if a business loses its EIN?

If you lose your EIN, don’t worry – it’s easy to recover. The IRS keeps a record of your EIN, and you can retrieve it in a few ways:

• Check previous documents: Look through any tax filings, business bank account documents, or other records where you might have used your EIN. It’s often listed on tax returns or official IRS correspondence.

• Contact the IRS: If you can’t find it in your records, you can call the IRS Business & Specialty Tax Line at 1-800-829-4933. They’ll ask for identifying information about your business (such as the name, address, and type of business) to verify your identity before providing your EIN over the phone.

• Look at your IRS confirmation letter: When you first applied for the EIN, the IRS sent a confirmation letter either by post or email. If you still have this letter, you can retrieve the number there.

While losing your EIN doesn’t affect your standing, it’s important to recover it to stay on top of tax filings and other obligations that require the number.

When might a business need a new EIN?

While changing your business name or location won’t require a new EIN, you might need a new number in the event of other changes, such as business structure or ownership. It’s always a good idea to check with the IRS or your accountant when making changes to ensure you’re following the correct processes.

Here are the main situations when the IRS requires you to obtain a new EIN:

• Changing business structure: If you switch from one legal structure to another – such as converting from a sole proprietorship to a corporation or from a partnership to an LLC – you’ll need a new EIN. Each structure is treated as a distinct legal entity.

• Changing ownership: When a business undergoes substantial ownership changes or when the entire ownership transfers to a new party, a new EIN is typically required.

• Forming a new corporation: If you start a new corporation, even from an existing sole proprietorship or partnership, you’ll need a new EIN.

• Filing bankruptcy: If your business files for bankruptcy and is reorganised, a new EIN might be necessary.

• Inheriting a business: If you inherit an existing business and decide to run it as a sole proprietor, you’ll need a new EIN.

How to update business information linked to an EIN

To update the information linked to your business’s EIN, you need to inform the IRS. Minor changes – such as updating your business phone number or email address – can be reported on your next tax return or by calling the IRS Business & Specialty Tax Line at 1-800-829-4933. You should inform the IRS of major changes, including a change in business name, address, or ownership structure.

Here’s how to address each of these scenarios:

Changing your business name

If you’re a sole proprietor or a single-member LLC, you can send the IRS a letter to change your business name. Include your EIN, old business name (if applicable), and new business name. Make sure you or an authorized person have signed it, and send it to the IRS office where you file your taxes.

If you run a corporation or partnership, you can report a name change on your annual tax return (Form 1120 for corporations, Form 1065 for partnerships). If it happens midyear, send the IRS a letter signed by a corporate officer or partner.

Updating your address, ownership, or responsible party

If your business moves, changes ownership, or gets a new responsible party (someone in charge of your business’s finances or taxes), you should notify the IRS within 60 days by filing Form 8822-B. It’s a simple form you can mail to the IRS office listed on the form’s instructions. While you can also update your address on your next tax return, the IRS prefers to know within 60 days so mail goes to the right place.

Changing your business structure

If you’re changing your business structure (e.g., going from a sole proprietor to a corporation), you’ll likely need a new EIN. If you don’t need a new number, report the change when you file your taxes for the new structure.