What’s an Employer Account Number, or State EIN?
An employer account number (EAN) is like a social security number, but for your business. More specifically, an EAN is a tax identification number for a specific state.
In the same way certain businesses need a federal employer identification number (FEIN) to pay federal taxes, businesses also need an EAN to pay state taxes.
To help you better understand what an EAN is, we'll cover how it differs from an EIN, what you need an EAN for, and how to apply for one.
Here’s What We’ll Cover:
EAN vs. EIN: What Are the Differences?
Some states will call an employer account number an employer identification number (EIN) instead. This confuses many people, but keep in mind that these are just two different names for the same concept.
Also, the state EIN or EAN is not the same as a federal EIN (FEIN). The word "federal" is often dropped when referring to the federal EIN, whereas the word "state" generally isn't. So if a document just asks for an "EIN," it's likely asking for your federal EIN, not your state EIN, unless otherwise specified.
The state EIN is commonly an eight-digit or ten-digit number, but the number of digits varies depending on the state, whereas a federal EIN is nine digits. In some states like Michigan, your state EAN is exactly the same as your FEIN. In these cases, your state EIN would be nine numbers too. Sometimes you'll also find multiple zeros at the beginning and end of your EAN.
Other Common Names
On a general level, the state employer account number is also referred to as a state tax identification number, state tax registration number, or a state employer ID.
Also, different states call their own state EIN or EAN other names too. For example, California's state EIN will also be referred to as "EDD state ID number," "EDD employer account number," and other similar names. Colorado will call their state EIN a "wage withholding account number." And the list goes on.
Do You Need an EAN for Your Business?
Not all businesses need an EAN or state EIN. You'll generally need one when you start hiring employees or if your business becomes incorporated. If you don't have any employees and are classified as a sole proprietor, you're allowed to use your social security number in place of an EAN most of the time. However, although sole-proprietors do not need an EIN, many get one to reduce the risk of identity theft associated with giving your social security number away.
You might also need multiple state EINs if you hire employees in various states and file state taxes in multiple states. Keep in mind that all but seven states require you to pay a state income tax, but depending on your business structure, you might still have to pay a corporate income tax in all but two states (Wyoming and South Dakota).
If you're a household employer, you would also need an EIN if you pay a household worker, such as a nanny or a maid, more than a minimal amount in a calendar quarter. Again, this minimal amount varies by state.
What Do You Need an EAN For?
The general purpose of an EAN is for tax and identity purposes. More specifically, you'll need it for the following reasons:
- To fill your quarterly wage report and pay quarterly state taxes online, you'll need an EAN in some states.
- To get certain business permits and licenses
- For payroll purposes and to use online payroll services
- For employment tax withholding
- To claim unemployment benefits
- When your employees make initial unemployment claims, they'll need this number.
- To report your state unemployment taxes. The unemployment law differs from state to state.
In some states, the self-employed will be asked for either an SSN or state EIN to claim the temporary unemployment benefits granted as a result of the Cares Act of 2020 (which keeps getting extended, but at the moment will end on September 30, 2021).
How to Get a State EAN
Before registering for any state EAN or EIN, you'll first need to apply for a federal EIN. You can get your FEIN in multiple ways, but the recommended method is online.
Once you get a FEIN for your business online, you're ready to get your EAN. The process of getting a state EIN differs from company to company based on the type of business.
The process of getting a state EAN also varies considerably from state to state. Go to your state's official website to find more information on how to apply.
When you file for a state EIN in certain states, you will get both your state EIN and an Unemployment Insurance (UI) tax rate. Some online payroll services will require these two numbers to make state tax payments on your behalf so be sure to keep these numbers safe.
Some services like LegalZoom offer to apply for a state EIN for you, but applying for yourself is generally a lot cheaper, and it's not a very difficult process.
Protecting Your EAN and FEIN
It's common for employers to lose their EAN and FEIN, so be sure to keep it in a place you'll remember. However, if you do misplace your EAN, you can find it in the following ways:
- Previous quarterly report (941s)
- Previous state tax returns
- If you applied for state or local licenses, contact your local government entity
The state employer account number, or EAN, is used for state tax purposes. Some states call it EAN, while some call it EIN, but they're both the same thing.
Not every business needs one. Only businesses with one or more employees, including those who are an employer of household workers, need to get a state EIN.
On top of needing a state ID number, you'll also need to become familiar with business licenses that you'll likely need. Learn more about business licenses.
More Resources on Small Business Accounting
- What Legal Requirements Are Needed to Start a Business?
- Doing Business As (DBA): What Is It and Why Is It Needed?