Do Nonprofit Organizations Need an EIN?
Key Takeaways
Most nonprofit organizations obtain an EIN early in formation
An EIN is required before applying for recognition under section 501(c)(3)
An EIN does not grant tax-exempt status
Banks generally require an EIN to open a nonprofit account
Churches are automatically treated as tax-exempt but usually still obtain an EIN
Most nonprofit organizations need an Employer Identification Number before applying for 501(c)(3) status or opening a bank account. This guide explains when an EIN is required, how to apply for one, and how it fits into the nonprofit formation process.
Introduction
When forming a nonprofit organization, it is not always clear which steps are legally required and which are simply part of the administrative process.
One of the most common questions founders ask is whether a nonprofit needs an EIN.
In most situations, the answer is yes. An Employer Identification Number is required before applying for recognition of exemption under section 501(c)(3), hiring employees, or filing certain federal tax forms. For that reason, many nonprofits obtain an EIN early in the formation process.
This is true even if you are starting a nonprofit on your own. Solo founders still need an EIN before submitting a 501(c)(3) application. Our guide, Can One Person Start a Nonprofit?, explains how individual founders approach these early formation steps.
Understanding where the EIN fits in the overall process helps you move forward with clarity and confidence.
What Is an EIN?
An Employer Identification Number, or EIN, is a nine-digit federal tax identification number issued by the Internal Revenue Service.
The IRS uses an EIN to identify an organization for federal tax purposes. It functions similarly to a Social Security number, but for an entity instead of an individual.
An EIN does not create a nonprofit organization. It does not grant 501(c)(3) status. It simply establishes the organization’s federal tax identity.
Do Nonprofits Need an EIN?
Yes, most nonprofits need an EIN. An Employer Identification Number is required before applying for recognition under section 501(c)(3), hiring employees, or filing federal tax forms.
The IRS requires an EIN before submitting IRS Form 1023 or IRS Form 1023-EZ to apply for recognition of exemption under section 501(c)(3).
In addition, financial institutions typically require an EIN before opening a nonprofit bank account. This ensures the organization’s finances are kept separate from personal accounts and supports proper recordkeeping.
Even nonprofits that do not plan to hire employees usually obtain an EIN so they are prepared for tax filings, grant applications, and compliance obligations.
If you are still organizing your nonprofit, our complete guide, How to Form a Nonprofit Organization in 8 Steps, explains how obtaining an EIN fits into the broader formation timeline.
Do Churches Need an EIN?
Organizations that meet the requirements of “churches” under IRS section 501(c)(3) are automatically considered tax-exempt and do not have to apply for tax-exempt status. The IRS explains this exemption for churches on its Churches and Religious Organizations page.
Even though churches are not required to apply for formal recognition, many still choose to submit Form 1023 to receive an IRS determination letter. This letter can provide documentation requested by banks, grantmakers, and other institutions. If a church applies for recognition of exemption under section 501(c)(3), it must obtain an EIN beforehand, as the IRS requires the organization’s EIN on the application.
Even when a church does not apply for formal recognition, it will generally still obtain an EIN. An EIN is typically needed to open a bank account, manage payroll if employees are hired, and complete certain financial reporting obligations.
Automatic exemption from the application requirement does not eliminate the practical need for a federal tax identification number.
When Is an EIN Required?
An EIN is required when a nonprofit must report information to the IRS or employ workers.
It is required before filing an application for recognition of exemption under section 501(c)(3). It is also required if the nonprofit hires employees and must report payroll taxes.
Nonprofits that are required to file annual information returns, such as Form 990, must also use their EIN on those filings. The IRS outlines annual filing requirements for tax-exempt organizations on its Form 990 Series Filing Requirements page.
Even when a nonprofit is small, it may still be required to file Form 990-N or another version of Form 990, depending on gross receipts. All of these filings require an EIN.
You can review ongoing filing responsibilities in our Nonprofit Compliance Checklist: What Every Founder Needs to Know.
Does Getting an EIN Make a Nonprofit Tax-Exempt?
No.
An EIN does not provide tax-exempt status. It does not authorize charitable contribution deductions. It does not confirm eligibility under section 501(c)(3).
To receive federal tax-exempt recognition, a nonprofit must submit Form 1023 or Form 1023-EZ and receive approval from the IRS.
If you are preparing for that step, our guide, How Long Does It Take to Get 501(c)(3)?, explains current IRS processing timelines and what to expect.
Obtaining an EIN is simply one foundational step before applying for recognition of exemption.
How to Apply for an EIN
Nonprofits can apply for an EIN directly through the IRS website at no cost. The IRS does not charge a fee to apply for an EIN. If you are planning your overall formation budget, you can review our guide, How Much Does It Cost to Start a Nonprofit Organization?, for a breakdown of required and optional expenses.
The IRS provides an online application system that issues the EIN immediately in many cases once the application is successfully completed.
Before applying, you should have:
- The nonprofit’s legal name
- The responsible party’s information
- State incorporation details, if already formed
If you have filed Articles of Incorporation with your state, use the exact legal name shown on those documents.
Obtaining the EIN early helps ensure you are prepared for banking, tax-exempt applications, and federal reporting requirements.
Final Thoughts
Most nonprofit organizations obtain an EIN early in the formation process. While not every nonprofit is required to have one at the earliest organizing stage, an EIN becomes necessary before applying for recognition of exemption under section 501(c)(3), hiring employees, or filing required federal information returns.
An EIN does not grant tax exemption. It establishes your organization’s federal tax identity so it can properly file with the IRS and open financial accounts.
If you would like guidance through nonprofit formation and the 501(c)(3) application process, Beacon Nonprofit can help you prepare and submit your documents with clarity and care. You can also explore our complete guide, How to Form a Nonprofit Organization in 8 Steps, for a clear overview of the process.
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