Introduction
An employer is a company, individual, or organization that employs or hires people to work for them. The people who are hired to work are known as employees. An employer has the right to manage and disburse salary or a wage to an employee. An employer account number abbreviated as EAN is an identification number that employers have for the purpose of their businesses. An EAN is mainly used to pay state taxes.
Employer Account Number
Employer account numbers have a variety of common terms and that should not confuse people because they all mean the same. Some of the EAN synonyms include:
- Employer identification number (EIN)
- State employer ID
- The State tax identification number
- State tax registration number
There is also a federal employer identification number (FEIN). This one is completely different from the rest as federal is not the same as the state. In other states like California, they refer to it as an EDD state ID number or EDD employer account number. Moreover, in Colorado, the name changes to a wage withholding account number.
Difference Between State EIN And Federal EIN
It should be noted that in some states, the state employer identification number means the same as the federal employer identification number. An example of such a state is Michigan state. However, in other states, an EIN is totally different from a FEIN.
The main difference between FEIN and EIN is that the state EIN frequently has an eight-digit to about ten-digit identification numeral. The federal EIN exclusively has a nine-digit recognition number.
How To Find An Employer Account Number
To have an EIN, one doesn’t need to view it as rocket science because it’s the easiest thing anyone can do. The most exciting part is that it does not cost anything! Yes, that’s right. The first thing is to apply for the FEIN then after, apply for an EAN. One can be able to apply for it through mail, phone, online, or fax. For online applications, the business should be located in the United States or its environs.
There is a form that applicants are required to fill out that is known as SS-4. There is an EIN application form that can be found on the online website of the IRS. For an employer account number to be issued there are specific details that should be noted on the application document. The main requirement is a personal taxpayer identification number along with the names of:
- The principal officer
- Owner
- The partner
- Trustor
There is more information that ought to be present on the application form such as:
- The commencement date
- The kind of entity
- The prime industry of the company
- The motive for applying the EIN
The Importance Of An Employer Account Number
Other than identification and for paying the levy, an employer identification number is important for:
- For an employer to attain licenses and different permits.
- For tax maintenance
- To reimburse the quarterly income of the state
- For online payroll purposes and services
- When an employee wants to make unemployment claims.
- To account for the state redundancy taxes
Employer Account Number Eligibility
All types of organizations can easily apply for EIN at any time. Moreover, it is important that an employer has an account number. Some of the organizations that may apply for an EAN are:
- Government bodies
- Sole proprietorship
- Trusts
- The Limited liability companies
- Partnerships
- Non-profit organizations
- Various Estates
- S corporations
EIN Theft Issues
As much as having an EAN is really important, there are incidences where a business may experience or receive unrealistic information. This happens when someone wants to steal another person’s business identity. Therefore, it is essential that organizations try to be very keen and notice any change in their company’s system.
If an organization has been hacked, some of the hints to be aware of include:
- Receiving random bills for an unknown credit card.
- Getting tax notices from fictitious employees.
- Having an accepted tax return yet it’s not filed.
Conclusion
The employer identification number is important for every business venture or any type of organization. The steps needed to have an EIN are very simple. Moreover, one does not need to have many employees to have the identification number. In any scenario, an employer can get an EAN even when there are only two workers present.
Frequently Asked Questions
- Is it mandatory for one to have an EIN?
No. It is not a must but only necessary.
- How do I check if my business has identity theft?
Get a business credit report
- Where can I retrieve my lost EAN?
From a previous business tax return