There has been some confusion as to whether an EIN is required for an individual LLC owner who does not have any employees.
Choosing LLC Tax Status
When a multi-member LLC is formed, it must choose how it wishes to be taxed. It can be taxed as either a partnership or a corporation, including an S-corporation. Form 8832 must be filed with IRS if the business wishes to be taxed as a corporation. Otherwise, the default tax structure is that of a partnership.
However, what if the LLC has just one owner and no employees? Under this scenario, the LLC is considered a “disregarded” entity. For income tax purposes, the entity will be taxed as a sole proprietorship. Like a multi-member LLC, the LLC can always elect to be taxed as a corporation by filing form 8832.
LLC EIN Laws and Requirements
The next question is if there is just one owner with no employees, does the LLC still need an Employer Identification Number (EIN)? The answer is not necessarily under certain circumstances.
If the LLC is a disregarded entity, in other words, it’s individually owned with no employees, an EIN is not required and it is not liable for excise taxes. The LLC should use the tax ID number (TIN) of the single-member owner (your social security number) for federal tax purposes. However, if the single-member LLC wishes to open a bank account or if state law requires an EIN, then an EIN must be obtained.