Just like some business entities, the Internal Revenue Service (IRS) considers non-profits legal entities; they are not recognized as individuals, and therefore, certain types of federal tax IDs are not relevant to non-profits. For example, you may think different types of non-profit ID’s including Social Security Numbers (SSN) or Individual Taxpayer Identification Numbers (ITIN) are used by non-profits, but you’d be wrong.
Non-profits are recognized using what’s called an Employer Identification Number, or EIN for short. With this number, non-profits can file for tax-exempt status, pursuant to the Internal Revenue Code section 501(c)(3).
Why Does A Non-profit Need An EIN?
All non-profits, before they can apply for tax-exempt status, must register for an EIN. This rule applies to all non-profit organizations, even those without employees, or those without the intention of acquiring employees in the future.
The IRS uses EINs to identify and track legal entities and their associated tax obligations—even if the legal entity is not required to pay income taxes. This nine-digit number is required to file for tax-exempt status. You can’t file for tax-exempt status, unless you register for an EIN first.
Once you obtain an EIN for a non-profit, it will stay with the organization in perpetuity, and will be used to file annual reports with the IRS.
Register For EIN Online
There are several ways you can register for an EIN. Non-profits can apply for an EIN by phone, fax, or by mail. However, these application processes are slow, and often confusing.
The fastest and easiest way to apply for an EIN is to get an EIN online through a third party provider. In addition to simplifying the paperwork and application process, online applications are completed within 24 hours and delivered right to your inbox. Plus, you can check your EIN status online whenever you like.
Different types of non-profit ID’s, including SSN and ITIN, will not work if you need to file for tax-exempt status. Apply for your EIN online today, and you can start using it tomorrow to grow your non-profit.