Church Tax and Employment Issues – Part 1 of 4: EIN Numbers: Employer Identification Number – Does Your Church Need One?
EIN numbers serve as a tax id number and are required for churches who have employees and process payroll taxes and for any church that wants to open a bank account. It is an easy process to obtain an EIN via the IRS website and you can get to that website page by clicking here. Interestingly enough, this online application is only accepted between the hours of 6 a.m. to 9 p.m. CST, Monday through Friday. You can also acquire an EIN by submitting Form SS-4 via mail.
Now what information do you need to apply for and receive an EIN?
- The person applying must provide their own valid Taxpayer Identification Number (SSN, ITIN, or EIN).
- You must complete the entire online session in one session.
- Know what type of legal structure your church is organized – most churches will choose the option “View additional types”
- Next you will choose either Church, Church-Controlled Organization or Other Non-Profit/Tax-Exempt Organization (if your church is a 501(c)(3). There is a detailed definition of what characteristics a church must possess to be considered a church.
- The next step is to declare why you are requesting an EIN. This will be either (1) Started a new business (Church) (2) Hired employees or (3) Banking Purposes
- You will then be required to list an individual as the “Responsible Party” for this EIN number providing their name and SSN and declaring you are authorized to act for the church. This person is defined by the IRS as someone who “controls, manages, or directs the applicant entity and disposition of its funds and assets”.
- Continue through the session to provide address information and you will receive your EIN number immediately.
IT IS IMPERATIVE you file this number in your church’s permanent paperwork file. You should print off the confirmation from your online session AND you will receive a letter by mail. Keep both documents in a safe place.
And remember, if your “responsible” person changes for your church, it is your responsibility to update this information with the IRS within 60 days via Form 8822-B. And if your church closes, you must cancel the EIN number.
Why is it important to ensure your EIN information is current with the IRS?
- The IRS requires it be current.
- If the IRS issues tax notices to your church and they are not able to be delivered due to a contact or address change, your church may incur penalties or interest should the notice be about payroll taxes.
If you need more information or would like to discuss, contact us today and we’ll talk!