Online Lesson: Employer Identification Number (EIN) for Nonprofits

Lesson Title

Step 4: Applying for Your Nonprofit Employer Identification Number (EIN)

Lesson Overview

Congratulations! You’ve successfully chosen your nonprofit’s name, defined your purpose, and filed your Articles of Incorporation. The next critical step is obtaining your Employer Identification Number (EIN).

In this lesson, you’ll learn what an EIN is, why your nonprofit needs one, and how to apply for it online through the IRS website.

Learning Objectives

By the end of this lesson, participants will be able to:

• Explain what an Employer Identification Number (EIN) is
• Identify why a nonprofit organization needs an EIN
• Understand when an EIN is required
• Follow the steps to apply for an EIN online through the IRS

What Is an Employer Identification Number (EIN)?

An Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS). It functions like a Social Security number for your nonprofit organization and is used by the IRS to identify your entity for tax and legal purposes.

Every nonprofit organization must have an EIN, even if it does not plan to hire employees right away.

Why Your Nonprofit Needs an EIN

Your nonprofit will need an EIN to:

• Open a nonprofit business bank account
• Hire employees or independent contractors
• Apply for business licenses or permits
• Apply for grants and nonprofit funding
• File federal and state tax forms
• Apply for 501(c)(3) tax-exempt status

Without an EIN, your nonprofit cannot legally operate or grow.

When Is an EIN Required?

You must obtain an EIN if your nonprofit:

• Has or plans to have employees
• Plans to open a nonprofit bank account
• Intends to apply for grants or financing
• Needs to file tax returns or IRS documents

➡️ Best practice: Apply for your EIN immediately after filing your Articles of Incorporation.

How to Apply for an EIN

Applying for an EIN is free and completed online through the IRS website. The application is electronic, and once approved, your EIN is issued immediately.

You will need:

• Your nonprofit’s legal name
• The mailing address
• Responsible party’s name and SSN
• Date of incorporation
• Type of organization (Nonprofit/Corporation)

Key Takeaways

• An EIN is required for all nonprofit organizations
• It is issued by the IRS and identifies your nonprofit
• You need an EIN to open bank accounts, apply for grants, hire staff, and file taxes
• The application is free and completed online

Next Step

Once you receive your EIN, you are ready to move forward with:

• Opening your nonprofit bank account
• Applying for tax-exempt status (501(c)(3))
• Registering for licenses and permits