Do I need an EIN if I am a Sole Proprietor?

Jason (P) David
Last Updated: September 22, 2022
Date Published: April 14, 2021

A Sole Proprietorship is not required to have an EIN (employer identification number) unless they have employees on payroll and/or file excise or pension plan tax returns.

If they do not have employees on payroll and do not file excise or pension plan tax returns, then the sole proprietor can use his or her social security number (SSN) rather than obtaining an EIN.

The sole proprietors SSN would be used as their tax ID on tax returns, business licenses, or to open a business bank account.

A sole proprietorship can only be issued one EIN while other business entities an have an unlimited number of EINs.

EIN’s must be used by corporations, partnerships and limited liability companies (LLCs).