EIN Guide for a Vermont Nonprofit Corporation

An Employer Identification Number is a nine-digit number the IRS issues to identify an organization for federal tax purposes. Think of it as a Social Security number for your nonprofit — the number that identifies the organization on federal filings, bank paperwork, and the exemption application. It's free from the IRS, and despite the name, you don't need to have employees to need one.

Why a nonprofit can't skip it

For a nonprofit, the EIN isn't optional the way it sometimes is for a tiny sole proprietorship. You need it to:

• Open a bank account. No bank will open an account for the organization without an EIN.
• Apply for tax-exempt status. The IRS exemption application (Form 1023 or 1023-EZ) requires the organization's EIN. You literally can't apply without it.
• File your annual Form 990. The 990-series return is filed under the EIN.
• Hire employees or pay contractors, if and when you do.
• Register for state tax accounts or exemptions where an EIN is required.

In short, the EIN is the key that unlocks almost everything else a nonprofit does after incorporation. It's one of the first things to get once the corporation exists.

The order of operations trips people up. Get the EIN after the Vermont Secretary of State has accepted your Articles of Incorporation, not before.

Why the sequence matters

When you apply for an EIN, the IRS records the organization's legal name and formation details. If you apply before the state has officially created the corporation, you risk a mismatch between your IRS record and your actual legal name and existence date. That mismatch causes friction later — with banks, with the exemption application, and with state tax accounts. Wait until you have your accepted Articles in hand, then apply using the exact legal name on that filing.

But get it before the exemption application and the bank

Once the corporation exists, don't drag your feet. You need the EIN before you can open a bank account, and you need it before you can file Form 1023 or 1023-EZ. For most Vermont nonprofits, the sequence is: incorporate with the state, get the EIN, open a bank account and adopt bylaws, then apply to the IRS for exemption. The EIN sits right in the middle, connecting the state formation to everything federal.

Applying is free and, for most organizations, fast. Never pay a third party that charges a fee just to obtain an EIN — the IRS issues them at no cost.

The online application

Your quickest option is to apply through the IRS EIN Assistant at IRS.gov. The online application:

• Takes about ten to fifteen minutes to complete
• Issues the EIN immediately at the end, so you can download the confirmation and use the number the same day
• Is available during the IRS's posted hours
• Requires the responsible party to have a valid Social Security number or ITIN

Who is the responsible party?

The IRS wants a responsible party — a real individual who controls or directs the organization, typically a director or officer such as the board president or treasurer. This is a person, not the entity, and their SSN or ITIN is used to verify identity during the online application. The responsible party's role is about accountability; it doesn't make them personally liable for the organization's obligations.

If the responsible party has no SSN or ITIN

Organizations whose responsible party lacks a US SSN or ITIN can't use the instant online tool. Instead, apply by fax or mail using Form SS-4. It's slower — fax responses take a few business days, mail longer — but it's the correct path when the online option isn't available.

A nonprofit's EIN application has a couple of spots where the right answer isn't obvious if you're used to for-profit paperwork.

Entity type

When the application asks what type of entity you are, select the option that reflects a nonprofit or other tax-exempt organization rather than an LLC, partnership, or standard corporation. Choosing the wrong type can create confusion between your EIN record and your later exemption application. Answer as the nonprofit corporation you actually are.

Reason for applying

Choose the reason that fits — usually starting a new organization. You're establishing the entity's federal identity, not, for example, changing the type of an existing organization.

Keep the confirmation safe

When the EIN is issued, save the CP 575 confirmation notice (or the online confirmation) somewhere permanent in your corporate records. You'll be asked for the EIN constantly — by the bank, on the exemption application, on every 990 — and reconstructing a lost confirmation from the IRS is a hassle. Treat it like a founding document.

A few avoidable errors show up again and again.

Getting more than one EIN

An organization needs exactly one EIN for its life. Applying twice — because the confirmation got lost, or because someone wasn't sure the first one went through — creates duplicate records that tangle up your bank accounts and IRS filings. If you can't find your EIN, retrieve the existing one from your records or by contacting the IRS rather than applying again.

Paying a fee for something free

Some services charge to "get your EIN," but the IRS issues them for free in about fifteen minutes online. Getting an EIN is one of the genuinely easy steps; don't pay for it as a standalone service.

Applying before incorporating

As covered above, applying before the state has created the corporation risks a name-and-date mismatch. Incorporate first, then apply.

Confusing the EIN with tax-exempt status

Having an EIN does not make your organization tax-exempt. The EIN just identifies the entity federally. Tax-exempt status is a separate approval from the IRS via Form 1023 or 1023-EZ. Plenty of organizations have an EIN and are not exempt — the EIN is a prerequisite for applying, not the exemption itself.