Governmental organizations are given Employer Identification Numbers (EINs) of the 98 series. It is used to identify tax-exempt businesses that aren’t 501(c)(3) nonprofits in particular. In addition to other tax-exempt entities like labor unions and agricultural cooperatives, this can also refer to federal, state, and local governments.
What do an EIN’s first two numbers actually mean? The answer is that they act as a prefix to denote the organization’s location. EINs granted to companies with locations throughout the United States, for instance, range from 01 to 12. On the other hand, only some tax-exempt organizations and government bodies are permitted to use the 98 series.
The procedure can be a little challenging if you’re a foreign company trying to do business in the US and need a tax ID number. You will be required to complete an application (Form SS-4) and offer proof of your identification and legal standing. You can also be required to designate a U.S. agent to serve as your representation for taxation.
Whether or not EINs may be checked online is one of the most often asked questions. Yes, you can check the status of an EIN using a service provided by the IRS called the EIN Assistant. If you are conducting business with a corporation and want to make sure they have a valid tax ID number, this might be extremely helpful.
The difference between an EIN and a Social Security number (SSN) should be noted as a final point. An SSN is used to identify individual taxpayers, but an EIN is used to identify a business or organization for tax purposes. Despite the fact that an EIN and an SSN both consist of nine digits, it is highly unlikely that they will ever be the same number in practice.