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EINs: one for each state?

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  • Avatar Grade4BorBor 
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    Status: Resident
    Posts: 3
    Joined: 08/21/2019

    I formed a LLC in Delaware and am planning on working as an IC in another state.  I will earn no income in the state of Delaware.  I have a foreign qualification for my LLC in the other state.

    Can I have a single EIN for my business?  Or do I need one for each state?

    #240399 Reply
    Avatar DavidGlennCPA 
    Participant
    Status: Accountant
    Posts: 60
    Joined: 06/12/2019

    An EIN, or Employer Identification Number, is issued by the IRS.  You only have one EIN for your business.

    States will often assign their own ID numbers to businesses in addition to the IRS issued EIN.  It’s almost always tied to a specific state level tax they have.

    The other state you’re working in might require your LLC to obtain its own unique state ID number.  This will depend on the rules of the state and how your LLC is taxed.  If you’re being taxed as a sole proprietor there’s usually no need to get a separate number.  But if you’re taxed as an S-corporation then it’s more likely the state will require you to register for your own ID number.

    Here in Hawaii, if your LLC is taxed as an S-corporation you’d need the following numbers –

    EIN

    State withholding number

    State unemployment tax account number

    General excise tax account number

     

     

     

    David Glenn, CPA | Glenn Advisory
    https://www.taxcpafordoctors.com | (808) 321-5664

    #240467 Reply
    Avatar Grade4BorBor 
    Participant
    Status: Resident
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    Joined: 08/21/2019

    Hi David,

    Thank you!  Makes sense, since the IRS is a part of the Fed. Gov’t.

    #240497 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8141
    Joined: 01/09/2016

    Only 1 addendum to @davidglenncpa ‘s excellent response, and this is more for other readers who may wonder about the benefits of a DE corp/LLC. For the typical small business, there are no advantages to setting up an entity in DE. In some cases, it actually complicates your filing requirements. However, there is a cottage industry promoting the benefits of Delaware filings, which charge a tidy sum for helping small businesses navigate the (relatively simple) process.

    DE corps/LLCs can benefit very large and complex business organizations (think publicly traded) but there is no special benefit for the typical small business. Of course, they have been promoted as a secret to abundant tax benefit for startup businesses, so whether to file in DE is a relatively common question.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #240507 Reply
    Avatar Grade4BorBor 
    Participant
    Status: Resident
    Posts: 3
    Joined: 08/21/2019

    Thank you, Johanna!

    #240616 Reply

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