An EIN for a food business is the Employer Identification Number the IRS uses to identify a business for federal tax purposes. Whether you need one depends mostly on how your business is set up and whether you have employees. Many solo food sellers, such as a home baker or a weekend market vendor with no staff, can operate without one, while any business that hires an employee will need one. The IRS issues EINs free of charge, and you can apply online directly. This explainer covers when you need one, how to get it and what changes when you start hiring. For anything specific to your situation, check with the IRS or a tax professional.
Key takeaways
- An EIN is a federal tax ID number for a business, issued by the IRS.
- A single-member LLC with no employees and no excise tax liability generally does not need its own EIN.
- Once you hire an employee, you will need an EIN.
- Applying for an EIN is free; beware of websites that charge for it.
What an EIN for a food business is used for
Think of an EIN as a Social Security number for your business. It appears on tax filings, payroll forms and, often, on applications such as business bank accounts and some supplier accounts. Some state and local permits for food businesses also ask for it, so it is worth checking the forms in our food business licenses checklist before you start applying.
Who needs one, and who may not
The rules depend on your business structure. The IRS guidance on single-member limited liability companies explains that a single-member LLC treated as a disregarded entity does not need an EIN if it has no employees and no excise tax liability; it uses the name and taxpayer identification number of its single owner instead. The same page states that an LLC will need an EIN if it has any employees.
| Situation | EIN usually needed? |
|---|---|
| Solo home baker or market seller, no employees | Often not; check your structure and state forms |
| Single-member LLC, no employees, no excise taxes | Generally no, per IRS guidance |
| Any business that hires an employee | Yes |
| Partnership or corporation | Yes |
| You want a separate number for your bank or suppliers | Optional, but you can apply |
Even when an EIN is not required, some owners get one to keep their Social Security number off invoices and forms they share with customers and suppliers. Rules for state taxes and local permits are separate from the federal EIN, so check what your state and city ask for as well.
How to apply, and what to avoid
The IRS page on applying for an EIN online is clear on two points: you never have to pay a fee for an EIN, and you should beware of websites that charge for one. Approved online applications are issued right away. The online application has to be completed in one session because it cannot be saved, so gather your details before you start.
Before you apply: a short checklist
The application asks for basic details about you and the business, so have them ready:
- Your legal name and taxpayer number as the responsible party.
- The business structure, such as sole proprietorship, LLC or partnership. If you are unsure, decide this first, because it affects whether you need an EIN at all.
- The business name and any trade name you sell under, for example the name on your market stall banner.
- Your business address and mailing address, which may be your home for a home bakery.
- What the business does, in plain words: baked goods sold at markets, prepared food sold from a truck, and so on.
- When you started or plan to start, and whether you expect to hire anyone in the next year.
Write down the EIN as soon as it is issued and save the confirmation notice. You will be asked for the number again when you open a business bank account, register with your state for any taxes that apply to your sales, or set up payroll. Keeping it with your licenses and permits means you are not hunting for it when an inspector or a bank asks.
What changes when you hire
Hiring your first employee changes your tax obligations. You will need an EIN, and you will take on payroll and employment tax responsibilities. Our step-by-step guide to hiring your first employee covers the registrations involved, and our walkthrough on starting a food side hustle explains the earlier steps that come before hiring.
Frequently asked questions
Is an EIN the same as a business license?
No. An EIN is a federal tax ID. Licenses and permits to sell food come from your state, county or city, and you usually need both if you have employees.
Can I get an EIN as a sole proprietor?
Yes. Sole proprietors can apply even when they are not required to, for example to keep their Social Security number private.
Does an EIN expire?
The IRS does not describe EINs as expiring on the pages above. If your business structure changes, check whether you need a new one.
Getting your tax ID sorted
Work out your structure, check whether you have or will have employees, and apply directly with the IRS if you need an EIN. Keep the confirmation with your business records. For more on the first steps of a food business, see our getting started guides.