EIN Guide for a South Dakota Nonprofit Corporation

The IRS issues every organization a nine-digit federal tax identification number called an Employer Identification Number. Think of it as a Social Security number for your organization: it's how the federal government, banks, and other institutions identify your nonprofit. Despite the word "Employer," you need one whether or not you ever hire anyone.

Why a nonprofit specifically needs an EIN

• To open a bank account. No reputable bank will open an account for your organization without an EIN. And a nonprofit absolutely needs its own bank account — commingling funds with a founder's personal account undermines the whole structure.
• To apply for tax-exempt status. Your IRS Form 1023 or 1023-EZ exemption application requires an EIN. You can't apply for 501(c)(3) status without one, so the EIN comes first.
• To file your annual returns. Your Form 990-series returns are filed under your EIN.
• To accept certain grants and payments. Funders and payment processors identify your organization by its EIN.

The EIN is not your tax-exempt status

A common misunderstanding: getting an EIN does not make you tax-exempt. The EIN just identifies the organization. Tax-exempt status is a separate determination the IRS makes on your Form 1023 or 1023-EZ application. You get the EIN first, then use it to apply for exemption.

Timing matters, and there's a clear right moment in the sequence.

After incorporation, before the exemption application

The natural order is: incorporate with South Dakota first, then get your EIN, then apply for 501(c)(3) exemption. Getting the EIN after your Articles of Incorporation are filed means the organization legally exists when you apply for the number, and you'll have the corporation's exact legal name and formation details to enter accurately.

Have your organizational details ready

Before you apply, confirm your organization's exact legal name as filed with South Dakota, your formation date, and your principal address. Entering a name that doesn't match your state filing creates mismatches down the line, so use the name exactly as it appears on your Articles.

The IRS offers several ways to apply, but one is faster and easier than the rest.

The online application (fastest)

Apply through the IRS EIN Assistant at IRS.gov. The online application is free, takes about ten to fifteen minutes, and issues your EIN immediately at the end — you can download the confirmation and start using the number the same day. This is the right method for the vast majority of nonprofits.

To apply online, you'll need a responsible party with a valid U.S. Social Security number or ITIN. The online session must be completed in one sitting; it can't be saved and resumed.

Fax or mail (for those without an SSN/ITIN)

If your responsible party doesn't have a U.S. SSN or ITIN, you can't use the online tool. Instead, complete Form SS-4 and submit it by fax or mail. Fax is faster than mail — expect a few business days for fax and several weeks for mail. This route is mainly relevant for organizations whose responsible party is a non-U.S. person.

A few fields trip up nonprofit applicants specifically. Getting them right the first time avoids having to correct the record later.

The responsible party

The IRS wants a responsible party — a real individual who controls or manages the organization, typically the president, board chair, or treasurer. This is a person, not the organization itself, and the IRS uses it to have a human point of accountability. Choose someone who'll be stable in the role.

Entity type

When the application asks what type of entity you are, select the option for a nonprofit corporation (the tool guides you through this). Don't select LLC or a for-profit corporation — you're a nonprofit corporation formed under South Dakota law.

Reason for applying

You'll indicate why you're applying — typically "started a new business" or the equivalent for a newly formed organization. Straightforward for a new nonprofit.

Avoid third-party EIN mills

You never need to pay for an EIN. The IRS issues it free. Websites that charge a fee to "obtain your EIN" are simply filling out the same free form on your behalf and charging for it. If a service includes EIN acquisition as part of a broader formation package, that's one thing — but a standalone charge just for the number is money you don't need to spend.

The EIN is a means to an end. Here's what it unlocks and what to do next.

Open your bank account

With the EIN confirmation, your filed Articles of Incorporation, and your bylaws, you can open a dedicated nonprofit bank account. Keeping the organization's money entirely separate from any individual's personal funds is fundamental — it protects the corporate structure and is basic financial hygiene for an organization handling other people's donations.

Apply for 501(c)(3) exemption

Now you can file Form 1023 or 1023-EZ with the IRS to seek tax-exempt recognition. The EIN is a required field on that application. This is the step that ultimately makes donations deductible and grants accessible.

Keep the confirmation safe

Store your EIN confirmation letter (the CP 575 the IRS issues) in your permanent corporate records alongside your Articles, bylaws, and — once it arrives — your IRS determination letter. You'll be asked for your EIN constantly: on grant applications, by banks, by payment processors, and on every annual return. Losing the confirmation isn't catastrophic (the IRS can help you retrieve the number), but keeping it filed saves repeated hassle.

One EIN per organization

Your nonprofit needs only one EIN, and it stays with the organization for its life. Don't apply for a second one because you changed your address or officers — you simply update the IRS. A new EIN is only relevant in narrow situations like certain structural changes, which don't apply to a typical ongoing nonprofit.