Quick answer: most one-person side hustles run as a sole proprietorship with no employees are not required to have an EIN; you can report the business on your personal return using your Social Security number. You do need an EIN if you hire employees, operate as a partnership or corporation, form a multi-member LLC, or file certain excise or employment tax returns. Many side hustlers get one anyway because it is free, takes minutes on IRS.gov and lets you give clients a number other than your Social Security number.
An Employer Identification Number, or EIN, is a nine-digit number the IRS assigns to businesses. Despite the word “employer” in the name, you do not need staff to have one. It works like a Social Security number for your business, and you will see it requested on bank applications, client paperwork and tax forms.
Whether you need one for a side hustle depends on how the business is set up and what it does. This guide explains the rules, the practical benefits and the exact steps to apply directly with the IRS. It belongs to our practical startup series inside the main side hustle ideas guide, alongside topics such as choosing a structure and setting up banking.
Sources: Internal Revenue Service, “Get an employer identification number” (online EIN application page), “Do you need an EIN?”, Publication 1635 (Understanding Your EIN), Form SS-4 instructions, Form W-9 instructions; U.S. Small Business Administration, “Get federal and state tax ID numbers.” General information, not tax or legal advice. Checked October 2026.
What an EIN Is
An EIN is a federal tax identification number for a business entity. The IRS uses it to track business tax filings, employment taxes and information returns. It is also called a Federal Tax Identification Number or FEIN.
The number is permanent. Once the IRS assigns it to a business, the agency says it never reuses or reassigns it, even if the business closes. You can close the account, but the number stays tied to that entity.
An EIN does not create a business, a license or legal protection on its own. It is a tax ID only. Registering a business name, getting a local license or forming an LLC are separate steps with your state or city.
When a Side Hustle Needs an EIN
According to the IRS, you generally need an EIN if any of these apply:
- You have employees.
- You operate your business as a corporation or a partnership.
- You file employment, excise, or alcohol, tobacco and firearms tax returns.
- You withhold taxes on income, other than wages, paid to a nonresident alien.
- You have a Keogh plan, a type of retirement plan for the self-employed.
- You are involved with certain types of organizations, such as trusts, estates, nonprofit organizations, farmers’ cooperatives or plan administrators.
For LLCs, the answer depends on the number of members and how the LLC is taxed. A multi-member LLC is taxed as a partnership by default and needs an EIN. A single-member LLC with no employees and no excise tax obligations is a “disregarded entity” for federal income tax, which means its income goes on the owner’s Schedule C under the owner’s Social Security number. Even so, the IRS notes that a single-member LLC may need an EIN for employment or excise tax purposes, and many banks ask for one to open an LLC account.
Our comparison of sole proprietor vs LLC for a side hustle explains how each structure works and when an LLC is worth forming.
When Your Social Security Number Is Enough
If you are a sole proprietor, which is the default for one person earning money on their own without forming a company, and none of the triggers above apply, you can use your Social Security number for business tax purposes. You report income and expenses on Schedule C and pay self-employment tax on Schedule SE, all under your SSN.
That covers a lot of side hustles: freelance writing, design, tutoring, pet sitting, reselling, and many online services. There is no penalty for not having an EIN if you are not required to have one.
Reasons to Get an EIN Anyway
Plenty of side hustlers apply for an EIN even when it is optional. Common reasons include:
- Privacy. Clients who may send you a 1099-NEC ask for a Form W-9 with your taxpayer identification number. Giving them an EIN means fewer people hold your Social Security number.
- Identity theft protection. Each copy of your SSN on a client’s file is another place it could be exposed. Using an EIN on business paperwork reduces that.
- Banking. Some banks prefer or require an EIN for a business checking account, especially one in a business name. See our guide to opening a separate bank account for your side hustle.
- Professional image. An EIN signals that you run a real business, which some clients and suppliers like to see.
- Wholesale and vendor accounts. Suppliers, marketplaces and sales tax registrations sometimes ask for one.
- Future growth. If you plan to hire help or set up certain retirement plans later, the number is already in place.
There is one trade-off. Having an EIN does not add filing obligations by itself for a sole proprietor with no employees, but keep the confirmation letter and use the number consistently so records stay matched.
How to Get an EIN From the IRS
The IRS issues EINs for free. Its online application page warns users to beware of websites that charge for an EIN and states that you never have to pay a fee for one. Third-party “filing services” may look official but simply submit the same free form for you.
Before you start
Gather this information:
- Your legal name and Social Security number or ITIN as the responsible party.
- Your business entity type, such as sole proprietor or LLC.
- A business name, if you use one, plus your mailing address and the county and state where the business is located.
- The date the business started and its main activity.
- If you are forming an LLC or corporation, complete the state formation first. The IRS advises forming the entity with your secretary of state before applying, or the application may be delayed.
Apply online
- Go to the IRS EIN application page and start the online tool.
- Choose your entity type and answer the questions about the business.
- Enter the responsible party’s information and your business details.
- Review and submit. If approved, the EIN is issued immediately.
- Download and save the confirmation notice (CP 575). You will need it for banking and future reference.
Practical details from the IRS page: the application must be completed in one session, it expires after 15 minutes of inactivity, and you can apply for only one EIN per responsible party per day. The online system is open Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern Time, Saturday from 6:00 a.m. to 9:00 p.m., and Sunday from 6:00 p.m. to midnight.
Other ways to apply
If you cannot use the online tool, for example because your principal place of business is outside the United States, you can file Form SS-4 by fax or mail. International applicants can also apply by phone. Mail applications take longest, often several weeks.
Using Your EIN After You Get It
Once you have the number, put it to work in a few places:
- Form W-9. Give clients your EIN in the taxpayer identification number section. Sole proprietors can enter either an SSN or an EIN; be consistent with the name you list.
- Bank account. Use it when opening a business account.
- Sales tax and state registrations. States often ask for it on sales tax permits and unemployment insurance accounts if you hire.
- Your tax return. Sole proprietors enter the EIN on Schedule C, line D. Your income tax return itself still uses your Social Security number.
Keep the CP 575 confirmation notice with your business records. If you lose your EIN, the IRS says you can find it on that notice, on prior tax returns, through your bank, or by calling the IRS Business and Specialty Tax Line.
EIN vs SSN vs ITIN
These three numbers are all taxpayer identification numbers, but each has a different job.
| Number | Issued by | Who uses it | Typical side hustle use |
|---|---|---|---|
| Social Security number (SSN) | Social Security Administration | Individuals | Personal tax return; sole proprietor business reporting when no EIN is required |
| Individual Taxpayer Identification Number (ITIN) | IRS | Individuals who need a tax ID but are not eligible for an SSN | Filing returns and serving as the responsible party on an EIN application |
| Employer Identification Number (EIN) | IRS | Businesses, trusts, estates and other entities | W-9 forms, business bank accounts, employment and excise filings |
The key point is that an EIN identifies the business, while an SSN or ITIN identifies you. For a sole proprietor the two are linked, because the business and the owner are legally the same person.
Keeping Your EIN Safe
An EIN is less sensitive than a Social Security number, but it can still be misused in business identity theft. Share it only with clients, banks and agencies that genuinely need it. Store the confirmation letter securely, and watch for unexpected IRS notices or credit inquiries in the business name. If you suspect misuse, the IRS has a dedicated process for business identity theft using Form 14039-B.
When You Need a New EIN
Changes in ownership or structure can require a new number. Generally, the IRS says a sole proprietor needs a new EIN when incorporating, taking in partners to operate as a partnership, or purchasing or inheriting an existing business. Changing your business name or location usually does not require a new EIN.
If you start as a sole proprietor and later form an LLC, check the IRS guidance on whether a new number is needed for your situation. The rules differ by entity type and tax classification.
Common Mistakes to Avoid
- Paying for an EIN. The number is free from the IRS.
- Applying before forming an LLC. Form the entity with the state first.
- Choosing the wrong entity type. A single-member LLC is not a sole proprietor on the form, even if it is taxed like one.
- Applying for multiple EINs. One business usually needs one EIN. Duplicate numbers cause confusion and mismatched records.
- Losing the confirmation letter. Save a digital copy right away.
- Assuming an EIN is a license. You may still need local permits or a business name registration.
How the EIN Fits Into Your Startup Checklist
An EIN is one small piece of setting up a side hustle properly. A typical order looks like this:
- Choose your structure (sole proprietor or LLC).
- Register a business name if you use one other than your own.
- Get an EIN if required or useful.
- Open a separate bank account.
- Check local licenses and sales tax permits.
- Set up bookkeeping. Our guide to tracking side hustle income and expenses has a simple system.
- Plan for taxes, including quarterly estimates if you expect to owe $1,000 or more.
Frequently Asked Questions
Frequently Asked Questions
Do I need an EIN for my side hustle? Not if you are a sole proprietor with no employees and no excise, employment or certain retirement plan filings. You can use your Social Security number. You need an EIN if you hire employees, run a partnership or corporation, or form a multi-member LLC.
How much does an EIN cost? Nothing. The IRS issues EINs for free. Websites that charge a fee are third parties submitting the same free application on your behalf.
How long does it take to get an EIN? Applying online on IRS.gov usually takes minutes, and the EIN is issued immediately if the application is approved. Fax and mail applications take longer.
Can a sole proprietor have an EIN? Yes. A sole proprietor can get an EIN even when it is not required, which lets you give clients an EIN on Form W-9 instead of your Social Security number.
Does a single-member LLC need an EIN? For federal income tax, a single-member LLC with no employees is usually disregarded and can use the owner's SSN. It may still need an EIN for employment or excise taxes, and many banks require one for an LLC account.
Does my EIN replace my Social Security number on my tax return? No. A sole proprietor still files Form 1040 with their Social Security number. The EIN is entered on Schedule C and used on business forms.
The Bottom Line
An EIN is required for some side hustles and optional for many others. If you are a one-person sole proprietorship, your Social Security number works, but a free EIN adds privacy and makes banking and client paperwork easier. Apply only on IRS.gov, form any LLC with your state first and save the confirmation letter. If your situation involves employees, partners or a corporation, a tax professional can confirm what you need.