Getting an EIN for Your California Nonprofit

An Employer Identification Number is a nine-digit federal tax identifier the IRS assigns to organizations. Think of it as a Social Security number for your nonprofit — a unique number that identifies the corporation on federal filings and financial paperwork. It's sometimes called a Federal Tax ID or FEIN.

A common misconception is that a nonprofit only needs an EIN once it has employees. Not true. Your California nonprofit needs an EIN almost immediately, and for reasons that have nothing to do with payroll:

• To apply for 501(c)(3) status. The IRS exemption application (Form 1023 or 1023-EZ) requires an EIN. You cannot apply for exemption without one.
• To open a bank account. Every bank will ask for the nonprofit's EIN before opening an account in the organization's name.
• To file your annual return. The Form 990 series is filed under the organization's EIN.
• To hire employees or pay contractors, if and when you do.

The EIN identifies the organization; it is not itself a tax. Getting an EIN doesn't mean the nonprofit owes anything — it's simply how the IRS keeps track of the entity.

Sequence your EIN correctly and the rest of the setup flows smoothly. Do it out of order and you can create avoidable rework.

Incorporate first, then get the EIN

Wait until your Articles of Incorporation are filed and the nonprofit legally exists before applying for the EIN. Applying under a corporation that isn't yet formed — or under the wrong name — creates a mismatch you'll have to untangle later. Once the Secretary of State has created the entity, you have the exact legal name and formation the EIN application asks for.

Then use the EIN for everything downstream

With the EIN in hand, you can open the bank account, apply for federal exemption, and register where required. That's the natural order: incorporate, get the EIN, open the account and apply for 501(c)(3), then handle California's Franchise Tax Board exemption and Attorney General registration.

The IRS issues EINs directly, at no cost. Be wary of any site that charges a fee simply to "get" an EIN — the number itself is always free from the IRS.

The online application (fastest)

Apply through the IRS EIN Assistant at IRS.gov. The online application is the quickest route: it takes about ten minutes, and the EIN is issued immediately at the end so you can download the confirmation and start using the number the same day. The online tool is available during the IRS's posted hours.

What you'll need

• The nonprofit's exact legal name as it appears on the filed Articles of Incorporation
• The organization's California address
• The responsible party — a director or officer — and that person's Social Security number or ITIN
• The type of entity (you'll indicate it's a nonprofit/corporation)

The responsible party

The IRS requires a "responsible party" — a real person who controls or manages the organization, typically a founding director or officer. The application asks for that individual's SSN or ITIN. This person isn't taking on personal tax liability for the nonprofit; they're simply the human point of accountability the IRS attaches to the entity.

If you can't apply online

Applicants without an SSN or ITIN, or who otherwise can't use the online tool, apply using Form SS-4 by fax or mail. These take longer — days to weeks — so plan ahead if this is your situation.

A handful of avoidable errors cause most of the EIN headaches we see with new California nonprofits.

Paying a third party for a free number

The EIN is free from the IRS. Sites that charge just to obtain one are selling you something you can get yourself in ten minutes. (Legitimate formation services may include EIN filing as a convenience within a broader package — that's different from a site whose only offer is charging for the free number.)

Applying before the corporation exists

Getting the EIN before your Articles are filed, or under a name that doesn't match the filed Articles, creates a mismatch between the IRS record and the state record. Incorporate first.

Confusing the EIN with tax-exempt status

Having an EIN does not make your nonprofit tax-exempt. This is one of the most common misunderstandings. The EIN identifies the organization; 501(c)(3) status is a separate approval you apply for with the IRS after you have the EIN, and California exemption is yet another approval from the Franchise Tax Board. An EIN is a prerequisite for exemption, not a substitute for it.

Losing the confirmation letter

The IRS issues an EIN confirmation (the CP 575 for new EINs). Save it in your permanent corporate records alongside your Articles, bylaws, and determination letters. Banks and grantmakers ask for it, and replacing a lost confirmation is slower than simply keeping the original.

The EIN is a small step, but it sits at a hinge point in the formation sequence. It comes right after incorporation and right before the two things that make your organization real: a bank account and a tax-exemption application.

Once you have it, you can open a dedicated nonprofit bank account — which is essential for keeping charitable funds separate and demonstrating to donors and regulators that the organization handles money responsibly. You can file Form 1023 or 1023-EZ for federal exemption. And you can proceed to California's Franchise Tax Board exemption (Form 3500A or 3500) and the Attorney General's charity registration.

We prepare and file your Articles of Incorporation with the California Secretary of State, which is the step that has to happen before the EIN. The EIN application itself is a quick, free process you complete directly with the IRS once the corporation exists — and getting the order right, incorporation then EIN, is what keeps the whole setup moving without a hitch.