A sole proprietor does not always need an EIN. If you have no employees and file no excise or pension plan returns, you can use your Social Security number as the tax ID of the business. You need an EIN (Employer Identification Number) as soon as one of the cases below applies, and many owners get one anyway so that they do not have to give their SSN to clients and banks.
When a Sole Proprietor Needs an EIN
The IRS requires an EIN if you:
- have employees
- file employment, excise, or alcohol, tobacco and firearms tax returns
- withhold tax on income, other than wages, paid to a non-resident alien
- have a Keogh retirement plan
- declare bankruptcy, incorporate, or take in a partner (the new entity gets its own EIN)
When You Do Not Need One
A sole proprietorship is not legally separate from its owner. With no employees and none of the filings above, the IRS accepts your SSN on Schedule C and on the forms your clients send you. The same is true of a single-member LLC that is taxed as a sole proprietorship, has no employees and owes no excise tax, although banks usually ask an LLC for its own EIN before they open a business account.
How Many EINs Can a Sole Proprietor Have?
One. A sole proprietor keeps the same EIN for every business they run under their own name, and does not get a new one for a new trade name or a new location. A new EIN is needed only when the business becomes a different kind of entity, for example a corporation or a partnership. See how many EIN numbers you can have and when you need a new EIN.
Why Get an EIN When It Is Optional
- You give clients and payment platforms the EIN on Form W-9 instead of your SSN.
- Most banks want an EIN to open a business account. See is an EIN a must to open a bank account.
- You are ready to hire: payroll returns cannot be filed without one.
How a Sole Proprietor Applies
The application is IRS Form SS-4 and the IRS charges nothing. If your business is in the U.S. and you have an SSN or ITIN, the IRS online tool issues the number immediately. If you live abroad or have neither number, the form goes by fax, phone or mail; see how to get an EIN without an SSN. We can prepare and file it for you through our EIN application service.
Source: IRS, Get an employer identification number; IRS, When to get a new EIN. Checked October 2026.
