How to Obtain an EIN in Delaware | A Comprehensive Guide

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Obtain an EIN in Delaware

In starting an LLC in Delaware, it is crucial to understand the importance of an Employer Identification Number (EIN) and how it impacts your business operations. An EIN is a unique nine-digit number the Internal Revenue Service (IRS) assigns to businesses operating in the United States for identification purposes. This number is essential for running a business, such as filing taxes, opening bank accounts, and hiring employees.

This article will explore the complete guide to obtaining an EIN in Delaware and the responsibilities and requirements associated with having an EIN.

Webinarcare Editorial Team will help you understand the process of obtaining an EIN. You must be guided by all the factors gathered in this article.

How to Obtain an EIN in Delaware

EIN Definition and Purpose

To form an LLC, an EIN is necessary for your business. An Employer Identification Number (EIN) is a federal tax identification number used by the Internal Revenue Service (IRS) to identify businesses in the United States. It is similar to a Social Security Number (SSN) for individuals but is specifically designed for businesses. The main purpose of an EIN is to help the IRS track and administer taxes for companies.

In Delaware, businesses are required to have an EIN if they meet any of the following criteria:

  • Have employees
  • Operate as a Partnership or Corporation in Delaware
  • File tax returns for employment, excise, or Alcohol, Tobacco, and Firearms (ATF) taxes
  • Withhold taxes on income, other than wages, paid to a non-resident alien
  • Have a Keogh plan (a tax-deferred pension plan for self-employed individuals or unincorporated businesses)
  • Are involved with trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers’ cooperatives, or plan administrators

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How to Obtain an EIN in Delaware

Obtaining an EIN in Delaware is a straightforward process; several methods are available to apply for one. However, if you want to be at ease with the process you can hire an LLC Services in Delaware, with add-ons of obtaining an EIN.

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Online Application Process

The easiest and fastest way to obtain an EIN is by applying online through the IRS website. The online application is available for businesses in Delaware and the rest of the United States.

irs

To apply for an EIN online, follow these steps:

  1. Visit the IRS EIN Assistant webpage.
  2. Click “Apply Online Now” and follow the prompts to complete the application.
  3. Provide the necessary information, such as your legal name, trade name (if applicable), business address, and the responsible party’s Social Security Number or Individual Taxpayer Identification Number.
  4. Select the appropriate legal structure for your business (e.g., sole proprietorship, general partnership, corporation, etc.).
  5. Provide additional information as required, such as the number of employees, the reason for applying, and the primary business activity.
  6. Review and submit your application.

Upon successful completion of the application, you will receive your EIN immediately. Save or print a copy of the confirmation notice for your records.

Other Application Methods

If you prefer not to apply online or are unable to access the online application, you can also obtain an EIN through the following methods:

  • Fax: Complete Form SS-4 (Application for Employer Identification Number) and fax it to the appropriate fax number listed on the IRS website. You should receive your EIN within four business days.
  • Mail: Complete Form SS-4 and mail it to the appropriate address on the IRS website. The processing time for mailed applications is approximately four weeks.
  • Telephone: International applicants can apply for an EIN by calling the IRS at 267-941-1099 (not a toll-free number) from 6:00 a.m. to 11:00 p.m. Eastern Time, Monday through Friday.

After you have your EIN number, you can benefit in several ways. It will give your Delaware LLC the final advantage necessary to operate fully without legal or judicial issues.

If you have a Registered Agent, he can file an EIN for your business. Also, if you are planning to file for an LLC in Delaware, your Registered Agent should file for the Certificate of Formation in Delaware.

Uses of EIN in Delaware

An EIN must run a business in Delaware. Some of the primary uses for an EIN include:

Opening a Business Bank Account

Banks typically require an EIN to open a business bank account, which is essential for separating your personal and business finances. With a business bank account, you can accept payments, deposit funds, and manage your company’s finances more efficiently.

If you are planning a bank for your Delaware business, you can check out the Best Banks in Delaware, which offer the best combination of fees, services, and convenience for your business needs.

Filing State and Federal Taxes

Businesses in Delaware must file taxes with both the state and federal governments, and an EIN is necessary to report and pay these taxes. Your EIN is used on various tax forms, such as income tax returns, employment tax returns, and excise tax returns which you can pay in Delaware Division of Revenue.

Payroll and Employee Tax Reporting

If your business has employees, you will need an EIN to report wages and other compensation paid to your workers. Additionally, an EIN is required for withholding and remitting federal income and payroll taxes on your employees’ behalf.

If you hire an employee for your business, you must request that your employees complete the following forms:

  • Employment Eligibility Form
  • Federal Tax Withholding Form
  • W-4 Form
  • Workers Compensation Claim Form
  • Disability Self-Identification Form
  • U.S. Citizenship and Immigration Services Form

Applying for Business Licenses and Permits

An EIN is often required when applying for business licenses and permits in Delaware. These licenses and permits may be necessary for various aspects of your business operations, such as zoning approval, health permits, or sales tax registration.

In Delaware, business license fee costs around the range of $50 – $300. You can check out Delaware Business Licenses to learn more about licenses and permits.

Establishing Credit and Securing Loans

An EIN can help your business establish credit, as it serves as an identifier for your company in the eyes of financial institutions. Additionally, lenders may require an EIN when applying for business loans or lines of credit.

Responsibilities and Requirements for EIN Holders in Delaware

As an EIN holder in Delaware, you are responsible for several tasks related to maintaining and managing your EIN. Some of these responsibilities and requirements include:

Updating the IRS on Changes to Business Information

If your business undergoes significant changes, such as a change in address, legal structure, or a responsible party, you must inform the IRS by filing the appropriate forms. This ensures the IRS has accurate and up-to-date information about your business and can properly administer taxes.

update my information

You can go to the Update My Information website of the Internal Revenue Service.

Required Tax Filings and Payments

With an EIN, your business is responsible for filing various tax returns and making tax payments to federal and state governments. Be informed about the specific tax obligations for your business type and industry in Delaware.

To keep your business in good standing in Delaware, you must file an Annual Report with the Delaware Secretary of State. The annual report provides updated information about your LLC, such as changes in address, members, or Registered Agent.

Record-Keeping Requirements

Proper record-keeping is essential for businesses with an EIN, as it helps ensure accurate tax reporting and compliance with laws and regulations. Maintain records of your company’s income, expenses, and other financial transactions to facilitate accurate tax filing and minimize potential issues with the IRS.

Establish a reliable accounting system to track income, expenses, and tax obligations. You can manage your finances using spreadsheets, accounting software, or hiring a professional accountant.

Closing an EIN Account

Suppose your business ceases operations or no longer requires an EIN. In that case, you must notify the IRS by submitting a letter containing your complete legal name, EIN, business address, and the reason for closing the account. This allows the IRS to update its records and prevent future tax-related issues.

cancel EIN

If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, include that when you write it to the IRS with the below mailing address:

  • Internal Revenue Service MS 6055 Kansas City, MO 64108
  • Internal Revenue Service MS 6273 Ogden, UT 84201

Or, you can check out Canceling an EIN via the IRS for further information.

Common Issues and Solutions for EIN in Delaware

Business owners in Delaware may encounter issues related to their EIN, such as losing or misplacing the number, incorrect information on the EIN application, or changes in business structure or ownership. Here are some solutions to common EIN-related problems:

  • Lost or Misplaced EIN: If you lose or misplace your EIN, you can contact the IRS by calling their Business & Specialty Tax Line at 1-800-829-4933. The IRS representative can provide you with your EIN after verifying your identity.
  • Incorrect Information on EIN Application: Suppose you discover an error on your EIN application, such as an incorrect business name or address. In that case, you can correct the information by submitting a letter to the IRS detailing the changes. Be sure to include your EIN, the incorrect information, and the correct information in your letter.
  • Change in Business Structure or Ownership: If your business undergoes a significant legal structure or ownership change, you may need to obtain a new EIN. Consult the IRS guidelines to determine if a new EIN is necessary.
  • Dealing with Identity Theft or Fraud: If you suspect your EIN has been compromised or used fraudulently, immediately report the issue to the IRS. The IRS can guide you through the steps to secure your EIN and protect your business from potential tax-related issues.

State-Specific EIN Information and Resources

To further assist businesses in Delaware, here are some state-specific resources and information related to EINs and taxation:

  • State Tax Agency Information: The Delaware state tax agency can provide information on state tax requirements, forms, and filing deadlines. Be sure to familiarize yourself with the state tax obligations for your business type and industry.
  • Business Registration Requirements: In addition to obtaining an EIN, businesses in Delaware must also register with the appropriate state agencies. This may include registering your business name, obtaining necessary licenses and permits, and registering for state taxes.
  • Employer Tax Obligations and Filings: Employers in Delaware must comply with various state tax obligations, such as withholding state income tax from employee wages and reporting these withholdings to Delaware Division of Revenue. Research your business’s specific employer tax requirements in Delaware.
  • Local Resources and Assistance for Businesses in Delaware: Many local organizations and government agencies in Delaware offer resources and assistance for small business owners. These resources may include business counseling, training, and financial assistance programs.

Do I Need to Apply for an EIN If I Also Have Business In Other States?

Yes, if you are operating a business with employees, have a corporation or partnership, or are required to file employment, excise, or alcohol, tobacco, and firearms tax returns, you will need an EIN (Employer Identification Number). If your business operates in multiple states, you only need one EIN for federal tax purposes. However, you may need to register for state-specific tax identification numbers in each state where you conduct business. Check with the Delaware Division of Revenue to determine their requirements.

FAQs

What is the EIN?
EIN stands for Employer Identification Number.
Is an EIN required for my Delaware-based business?
It is required if your business will have employees or file certain tax returns.
How do I obtain an EIN in Delaware?
You can obtain one online through the IRS website or by mail or fax.
When should I apply for an EIN in Delaware?
You should apply as soon as your business is legally formed.
Is there a fee to apply for an EIN in Delaware?
No, the application process is free.
Can I apply for an EIN for my Delaware business if I live in another state?
Yes, as long as your business is based in Delaware.
How long does it take to receive an EIN for my Delaware business?
You can receive it immediately online or within a few weeks if you apply by mail or fax.
Can I apply for an EIN online for my Delaware business?
Yes, you can apply through the IRS website.
Do I need a Social Security Number to apply for an EIN in Delaware?
No, a Social Security Number is not required.
Can I apply for an EIN by phone for my Delaware business?
No, phone applications are not accepted.
Do I need an EIN for a sole proprietorship in Delaware?
Only if you have employees or file certain tax returns.
Can I have multiple EINs in Delaware for different businesses?
Yes, each business entity should have its own EIN.
When should I update my EIN information in Delaware?
If your business information changes.
Do I need to renew my EIN in Delaware?
No, EINs are permanent unless your business structure or ownership changes.
Can I cancel my EIN in Delaware?
Yes, you can cancel it by sending a written request to the IRS.
What if I lose my EIN confirmation letter for my Delaware business?
You can request a replacement letter from the IRS.
Can I change the Responsible Party on my EIN for my Delaware business?
Yes, you must notify the IRS of the change.
How do I close my Delaware business EIN?
You must submit a final tax return and notify the IRS of the closure.
Can I get an EIN for a foreign Delaware LLC?
Yes.
Is an EIN different from a Delaware State Tax ID?
Yes, they are two separate identifiers.
Do I need an EIN for a Delaware non-profit?
Only if it has employees or files certain tax returns.
Do I need an EIN for a Delaware trust?
It depends on the type of trust.
Can I change the name on my Delaware business EIN?
Yes, you must notify the IRS of the name change.
Can I get an EIN for my Delaware business if it’s not yet registered?
No, your business must be legally formed first.
Do I need to provide my Delaware business address to obtain an EIN?
Yes.
What if I make a mistake on my EIN application for my Delaware business?
You can correct it by sending the appropriate documentation to the IRS.
Can I use the same EIN for multiple Delaware businesses?
No, each business entity should have its own EIN.
Is an EIN required for a one-person Delaware LLC?
No, unless it has employees or files certain tax returns.
Can I use my Delaware EIN for tax purposes in other states?
Yes, as long as your business operates in those states.
Why do I need an EIN in Delaware?
You need an EIN in Delaware if you are starting a business or hiring employees in the state. It is also required for certain tax filings.
How do I apply for an EIN in Delaware?
You can apply for an EIN in Delaware online, by mail, fax or telephone.
What is the cost to obtain an EIN in Delaware?
There is no cost to obtain an EIN in Delaware.
How long does it take to obtain an EIN in Delaware?
It typically takes around 4 to 5 business days to obtain an EIN in Delaware if you apply online.
How do I know if I need an EIN in Delaware?
You need an EIN in Delaware if you are starting a business or hiring employees in the state. It is also required for certain tax filings.
What is a Delaware EIN?
A Delaware EIN is a unique identifier for your business that is assigned by the IRS. It is necessary in order to pay taxes, open a bank account or obtain lines of credit.
Can I apply for an EIN in Delaware if I live in another state?
Yes, you can apply for an EIN in Delaware if you live in another state as long as you plan to start a business or hire employees in Delaware.
How do I apply for an EIN without a social security number in Delaware?
You cannot apply for an EIN in Delaware without a social security number or an individual taxpayer identification number.
Can I obtain a Delaware EIN for a foreign entity?
Yes, a foreign entity can obtain an EIN in Delaware as long as they have a US-based responsible party.
What company types in Delaware need an EIN?
All types of companies in Delaware including sole proprietorships, partnerships, LLCs, corporations and non-profit organizations need an EIN.
Does an EIN expire in Delaware?
No, an EIN does not expire in Delaware, unless the entity using the EIN goes out of business, is cancelled, or revoked.
Can a Delaware EIN be transferred to another entity?
No, a Delaware EIN cannot be transferred from one entity to another. A new EIN must then be obtained for the new entity.
What if I made a mistake on my Delaware EIN application?
If you made a mistake on your Delaware EIN application, you can make corrections by contacting the IRS.
How do I change the responsible party for my Delaware EIN?
You can change the responsible party for your Delaware EIN by notifying the IRS in writing.
Is a Delaware EIN the same as a Delaware tax ID number?
Yes, a Delaware EIN is the same as a Delaware tax ID number.
Can I get multiple EINs in Delaware?
No, you can only get one EIN per entity in Delaware.
Does Delaware recognize a fiscal year-end for a taxable year?
Yes, Delaware recognizes a fiscal year-end for a taxable year, it can be any date within the calendar year end.
Do I need a new EIN if I change my business name in Delaware?
No, you do not need a new EIN if you change your business name in Delaware.
How often do I need to renew my Delaware EIN?
You do not need to renew your Delaware EIN. It is valid until you change your business structure or cancel your entity.
Can I open a bank account with just my Delaware EIN?
No, you need to provide additional documents such as your articles of organization, or incorporation amendment in order to open a bank account.
What do I do if I lost my Delaware EIN?
You can retrieve your lost Delaware EIN by contacting the IRS.
Do I need to apply for a new EIN if I move my business to another state?
Yes, you need to apply for a new EIN if you move your business to another state.
Can I obtain an EIN for a dormant entity in Delaware?
Yes, you can obtain an EIN for a dormant entity in Delaware, as it will not void the EIN.
Does a sole proprietor in Delaware need an EIN?
A sole proprietorship in Delaware is not required to have an EIN, if the owner is the only employee and does not have a separate legal entity other than themselves.
Do I need to be physically present in Delaware to obtain an EIN?
No, you do not need to be physically present in Delaware to obtain an EIN.
Can I cancel my Delaware EIN?
Yes, you can cancel your Delaware EIN by contacting the IRS.
Is there a time limit for applying for an EIN in Delaware?
No, there is no time limit for applying for an EIN in Delaware.
What happens if I don’t obtain an EIN in Delaware?
If you don’t obtain an EIN in Delaware when it is needed, you will not be able to begin your business or hire employees.
Can I apply for an EIN in Delaware under a pseudonym?
No, you cannot apply for an EIN in Delaware under a pseudonym.

Also Read

How to Save Money While Getting Ein for Delaware LLC

One of the most common mistakes entrepreneurs make when applying for an EIN is hiring a third-party service to do it for them. While these services can streamline the process, they often come with hefty fees that can quickly add up. Instead, consider applying for your EIN directly through the IRS website. The online application is free, easy, and can be completed in a matter of minutes. By taking the DIY approach, you can save money that would have otherwise been spent on unnecessary fees.

Another way to save money while obtaining an EIN for your Delaware LLC is to avoid rushing the process. While it may be tempting to expedite your application to get your business up and running as quickly as possible, opting for regular processing can save you a significant amount of money. The IRS offers a free standard processing option that typically generates your EIN within a few weeks. By being patient and planning ahead, you can avoid paying unnecessary fees for expedited processing.

Furthermore, when applying for an EIN, it is crucial to avoid making any mistakes on your application. Incorrect information can lead to delays and additional fees down the road. To ensure that your application is error-free, double-check all the information before submitting it. Additionally, make sure that you have all the necessary documentation and information on hand, including your Social Security Number and the legal name of your LLC.

Lastly, it is essential to keep in mind that once you have obtained your EIN, you must use it for its intended purpose and not for personal transactions. Mixing personal and business finances can lead to complications and potential legal issues in the future. To avoid any confusion, keep your business transactions separate from your personal finances and use your EIN only for business-related activities.

In conclusion, while obtaining an EIN for your Delaware LLC may seem like a costly process, there are several ways to save money along the way. By applying for your EIN directly through the IRS website, avoiding unnecessary rush fees, double-checking your application for errors, and keeping your business and personal finances separate, you can save money and ensure a smooth transition into business operations. Remember, every penny saved during the initial stages of setting up your LLC can contribute to the long-term success and profitability of your business.

Conclusion

Understanding the importance and uses of an EIN in Delaware is crucial for the successful operation of your business. By obtaining and maintaining your EIN, you can ensure compliance with federal and state tax laws, establish a strong financial foundation for your company, and access various resources and opportunities for growth. Be sure to utilize the available resources and support for businesses in Delaware to maximize your chances of success.

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