Understanding the First Two Digits of EIN: What Do They Mean?

What do first two digits of EIN mean?

Daily Limitation of an Employer Identification Number. Prior to 2001, the first two digits of an EIN (the EIN Prefix) indicated the business was located in a particular geographic area. In 2001, EIN assignment was centralized, although all 10 campuses can assign an EIN, if necessary.

Read more on www.irs.gov

It’s crucial to get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) when launching a firm. An EIN is a special nine-digit number given to a corporate organization to identify it for tax purposes. The first two numbers of an EIN are crucial since they reveal information about the business’s location.

What Does the EIN’s First Two Numbers Indicate?

The location of the business entity is indicated by the first two digits of the EIN. This group of numbers is known as the “prefix.” Each state receives a unique prefix from the IRS based on its geographic location. Businesses in California, for instance, have a prefix of 12 or 22, whereas those in New York have a prefix of 02 or 32.

Can You Have Multiple DBAs Under One EIN, then?

You can use different Doing Business As (DBA) names under the same EIN, yes. A DBA is a name used to do business that differs from the company’s legal name. For instance, a company might have a DBA for its online store that is distinct from its physical store. It is significant to remember that every DBA needs to be registered with the state where the company is based.

Can I Have More Than One EIN?

Although it is possible to have more than one EIN number, doing so is not advised unless there is a good reason to do so. A new EIN might be required, for instance, if a business is sold or changes its legal form. However, if a company is just extending its services or introducing new products, it does not require a new EIN.

Do I Need a New EIN for a Second Business as a result?

Yes, a company will require a new EIN if it operates under a changed legal name. For instance, a sole proprietorship will require a new EIN if it decides to incorporate. A new EIN will also be required if a business owner launches a second venture that runs as a different legal entity. The same EIN may be used by a business owner who launches a new venture that operates as the same legal entity.

In conclusion, an EIN’s first two digits are important since they reveal information about the business’s location. A single EIN can be used for many DBA names, but each DBA needs to be registered with the state. Having more than one EIN number is also conceivable, but it is not advised unless there is a good reason to do so. Finally, a new EIN will be required if a business operates as a separate legal entity.

FAQ

Where can I find my employer payroll tax account number?

Your Employer Identification Number (EIN), a special nine-digit number provided by the Internal Revenue Service (IRS), is also referred to as your employer payroll tax account number. Your tax returns, W-2 forms, and payroll statements are just a few examples of the papers where you might locate your EIN. If you are unable to find your EIN through these routes, you can also get in touch with the IRS directly to seek it.