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What is a Federal Tax Identification Number?

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Quick Answer

A Federal Tax Identification Number, also known as an Employer Identification Number, is a number assigned to a business as a form of identification, according to the Internal Revenue Service. Individuals typically use their Social Security numbers as a tax identifier, while businesses need the separate Tax Identification Number.

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Full Answer

A Federal Tax Identification Number is free to businesses with an online application option through the IRS website. The online process provides the number immediately. Businesses also have the option of completing Form SS-4 to obtain a number.

The Federal Tax Identification Number goes on any tax documents submitted by the business, notes the IRS. This includes tax returns for the business and tax forms such as W-2s provided to employees.

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