This article provides a detailed overview of when you need to apply for a new EIN and when you don’t, based on IRS guidelines. Avoid delays and unnecessary reapplications with this official breakdown.
If you’re using an Employer Identification Number (EIN), a common question arises:
Do I need to apply for a new EIN?
The IRS provides specific rules on when a new EIN is required and when your current EIN remains valid despite changes in your business. Below is a practical summary of the official guidance that helps you avoid unnecessary paperwork and tax issues.
1. When You Must Apply for a New EIN
Regardless of whether you are a sole proprietor, partnership, corporation, or trust, the following changes typically require a new EIN:
✅ Sole Proprietors
- You add a partner and become a partnership.
- You incorporate your business (form an LLC or Corporation).
- You establish a retirement or profit-sharing plan.
- You file for bankruptcy under Chapter 7 or Chapter 11.
✅ Partnerships
- The business becomes a sole proprietorship or corporation.
- The original partnership ends, and a new one is formed with different partners.
- One partner buys out the others and continues as a sole proprietor.
✅ Corporations
- You form a subsidiary that needs its own EIN.
- Your business merges and forms a new legal entity.
- You receive a new corporate charter or change legal structure.
- The corporation changes to a sole proprietorship or partnership.
✅ Trusts and Estates
- A living trust becomes a testamentary trust.
- The revocable trust becomes irrevocable.
- You create a trust from estate funds.
2. When You Do NOT Need a New EIN
The following changes do not require you to apply for a new EIN:
✅ General Business Changes
- You change the name of your business.
- You move or open new business locations.
- You change owners, officers, or trustees (without legal structure change).
- Your corporation declares bankruptcy (unless a liquidating trust is created).
✅ Spouse-Owned Businesses
Under the Small Business and Work Opportunity Tax Act of 2007, a husband and wife running a jointly owned business can elect to be treated as a Qualified Joint Venture, allowing them to avoid applying for a partnership EIN.
3. Summary
Not every business change requires a new EIN.
Understanding IRS rules helps you avoid unnecessary delays, duplicate applications, and compliance issues.
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