If you’re starting a nonprofit, one of your first questions might be: do I need a tax ID number for a non profit? The short answer is yes. Every nonprofit organization needs a Federal Tax ID Number, also known as an Employer Identification Number (EIN), even before applying for 501(c)(3) status.
In this blog, we’ll explain why an EIN is essential for nonprofits, when to apply, and how to get one.
What Is a Tax ID Number (EIN)?
A Tax ID Number, or Employer Identification Number (EIN), is a unique nine-digit number issued by the IRS to identify your nonprofit for federal tax purposes. It functions like a Social Security Number but is used for organizations and businesses.
Why Nonprofits Need a Tax ID Number
Even though nonprofits may be exempt from paying federal income tax, they still need an EIN for:
- Filing for 501(c)(3) tax-exempt status
- Opening a bank account in the organization’s name
- Hiring employees or contractors
- Filing IRS forms like Form 990
- Receiving donations and grants
- Applying for state and local licenses or permits
Without an EIN, your nonprofit can’t operate legally in most capacities.
When Should a Nonprofit Apply for an EIN?
You should apply for a tax ID number as soon as you form your nonprofit organization—after adopting bylaws and electing a board of directors, but before submitting Form 1023 or Form 1023-EZ to the IRS for tax-exempt status.
How to Get a Tax ID Number for a Nonprofit
Getting an EIN is free and easy through the IRS:
- Online: Visit the IRS EIN Assistant for immediate issuance.
- By Mail or Fax: Submit Form SS-4.
- By Phone: International applicants can call 267-941-1099 (not toll-free).
You’ll need basic information about your nonprofit, such as its legal name, mailing address, and responsible party’s details.
Common Misconceptions
- “My nonprofit doesn’t have income, so we don’t need an EIN.”
→ False. EINs are required regardless of income level. - “We can wait until we get 501(c)(3) approval.”
→ Wrong. You need an EIN to apply for tax-exempt status.
Final Thoughts
So, do I need a tax ID number for a non profit? Absolutely. An EIN is a must-have for all nonprofits, whether small or large. It’s the foundation for tax filings, financial transactions, and maintaining legal status.
