How to Apply for an EIN for Your Nonprofit: Step-by-Step Guide to Form SS-4
Why Nonprofits Need to Understand Federal and State Requirements
Nonprofits are born out of necessity and good intentions. However, in order to get to the doing good works stage, you have to jump through the regulatory hoops. There are two different sets of requirements, federal and state.
What Is an Employer Identification Number (EIN)?
Your first federal obligation is obtaining an employer identification number (EIN) also known as a taxpayer identification number (TIN). Your organization must have an employer identification number even if it does not have employees. This number is what a social security number is to humans. It is a unique identifier for your nonprofit.
What Comes First—TIN or State Formation?
While obtaining a TIN may seem like the first step, it is not. Your first step is organizing in the state your nonprofit will be headquartered in. You will find that the process of thinking through the formation of your nonprofit, will provide you with a lot of the answers you will need in order to fill out Form SS-4, the application form used to obtain a TIN.
Why Do I Need a TIN?
An organization may be organized for a charitable, educational, or religious purpose under state law and be considered a nonprofit, but in order to qualify as a tax exempt organization, or a 501(c)(3), your organization must qualify with the IRS. This is what will enable your donors to deduct their donations to your organization.
The tax exemption process begins with applying for a TIN with the IRS. The next step is filing Form 1023, which you cannot do without an EIN with the end result being a determination letter from the IRS confirming that your organization has been granted 501(c)(3) status. Hang on to both your EIN letter and your tax determination letter when you receive them, you are going to be asked for copies often.
Applying for a Taxpayer Identification Number
This can be done several ways. If you are working with an attorney or an accountant, you can ask them to apply for the number for you. If they have prepared your organizational documents for you, this should be part of the process. If, however, you are doing this yourself, you can apply online at IRS TIN
Tips for Filling Out Form SS-4
I recommend that you fill out Form SS-4 before you get online so you are sure that you have all the information you need and that you understand the question being asked. Here’s a link to the form, Form SS-4 which can also be filled out, signed, and mailed to the IRS, although I don’t have to tell you that is a much slower process than filing online!
What Information You'll Need for Form SS-4
The first question is the name of the legal entity. At this point you should have already determined that the name you want to use is available and that your organizational documents have been accepted by the state you are registering in. Be prepared to provide a contact person and have the address and social security number of that person available.
The second question is the type of organization your nonprofit is. Nonprofits are usually formed as not-for-profit corporations. Only a handful of states have an LLC designation available for nonprofits. You have already worked through this, however, so you know what type of organization you have and you should be able to answer that question. For line 9a, unless your organization is a church (or mosque, temple, or synagogue etc.) check the box for “Other nonprofit organization” and specify the type (i.e. educational organization).
Understanding the SS-4 Instructions
Here’s a link to the instructions to Form SS-4, they seem dense but they really do answer a lot of questions. Instructions SS-4
Coming Up Next…
Coming up next, Form 1023 and applying for tax exemption. **Stay tuned!
