If you're a farmer looking to start payroll for your employees, one of the first steps is to obtain an Employer Identification Number (EIN). This article explains what an EIN is, why you need it, and how to get one.
What is an EIN?
An Employer Identification Number (EIN) is a unique, nine-digit number assigned by the Internal Revenue Service (IRS) to businesses and organizations for tax purposes. It’s often referred to as a Federal Tax ID Number. If you have employees or operate as a business entity, such as a corporation or partnership, you are required to have an EIN.
For farmers, having an EIN allows you to:
File employment taxes
Withhold income taxes from your employees’ paychecks
Report employee earnings to the IRS
Issue W-2 forms at the end of the year
Open a business bank account
Why Do Farmers Need an EIN?
Farmers who hire employees must obtain an EIN to comply with federal payroll tax requirements. An EIN ensures that your farm business is recognized by the IRS and that you can manage payroll for your workers legally and efficiently.
If you're just starting to hire employees for your farm operation, or you're setting up payroll for the first time, getting an EIN is a critical step to keep your farm compliant with tax regulations.
How Can a Farmer Get an EIN?
Getting an EIN is a straightforward process, and it can be done for free. Here’s how you can obtain one:
Online Application: The easiest and fastest way to apply for an EIN is online through the IRS website. Here are the steps:
Go to the IRS EIN Application website.
Complete the application form by providing information about your farm operation, such as your business name, type of entity (e.g., sole proprietorship, partnership), and your role in the business.
Once you complete the application, you’ll receive your EIN immediately, which you can use to start your payroll process right away.
By Mail: You can also apply for an EIN by mailing a completed Form SS-4 to the IRS. This method may take a few weeks, but it’s another option if you prefer not to apply online. Here’s what you need to do:
Download and fill out Form SS-4 from the IRS website.
Mail the form to the address listed in the instructions for your state.
Wait for the IRS to process your request and send your EIN by mail.
By Fax: If you prefer to send your application via fax, you can fax the completed Form SS-4 to the IRS. You’ll typically receive your EIN within four business days.
By Phone (International Applicants Only): If you’re located outside the U.S., you can apply for an EIN by calling the IRS at (267) 941-1099.
When Should You Get an EIN?
You should obtain your EIN before you start paying employees, withholding taxes, or filing payroll tax forms. The sooner you apply for an EIN, the sooner you can set up your payroll system and remain compliant with tax laws.
What If You Already Have an EIN?
If your farm already has an EIN because you’ve filed taxes for your farm business in the past, you don’t need to get a new one when you start payroll. However, make sure your EIN is up to date and registered with the correct entity type for your farm.
Need Help?
If you’re unsure whether you need an EIN or if you need help setting up payroll for your farm, FarmRaise can guide you through the process. Reach out to us for assistance with farm payroll setup, tax preparation, and financial management.