EIN for corporations: when do you need one?

Corporations

Definition

A corporation is a legal entity or structure created under the authority of a state’s laws, made up of one or more people who become its shareholders. 

The entity exists separately from its members. Because a corporation is an entity in its own right, it is responsible for its own debts and obligations. 

When a corporation is formed, the prospective shareholders transfer money, property or both in exchange for the corporation’s capital stock. 

The following businesses formed after 1996 are taxed as corporations: 

• A business formed under a federal or state law that refers to it as a corporation, body corporate or body politic 
• A business formed under a state law that refers to it as a joint-stock company or joint-stock association
• An insurance company 
• Certain banks 
• A business wholly owned by a state or local government 
• A business specifically required to be taxed as a corporation under the Internal Revenue Code 
• Certain foreign businesses 
• Any other business that elects to be taxed as a corporation. 

Form(s): 

Corporations generally file a return from the 1120 series, plus any other returns that apply (such as employment tax or excise tax returns).

The 1120-series returns are:

– Form 1118, Foreign Tax Credit—Corporations (attached to the return when the credit is claimed)

– Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation

– Form 1120, U.S. Corporation Income Tax Return

– Form 1120-C, U.S. Income Tax Return for Cooperative Associations

– Form 1120-F, U.S. Income Tax Return of a Foreign Corporation

– Form 1120-DISC, Interest Charge Domestic International Sales Corporation Return

– Form 1120-H, U.S. Income Tax Return for Homeowners Associations

– Form 1120-L, U.S. Life Insurance Company Income Tax Return

– Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons

– Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return

– Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations

– Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts

– Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies 

– Form 1120-S, U.S. Income Tax Return for an S Corporation 

– Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B) 

– Form 1120-W, Estimated Tax for Corporations 

– Form 1120-X, Amended U.S. Corporation Income Tax Return 

You will need a new EIN if any of the following applies: 

– You are a subsidiary of a corporation and currently use the parent company’s EIN 

– You become a subsidiary of a corporation 

– The corporation becomes a partnership or a sole proprietorship 

– You create a new corporation after a statutory merger 

– You receive a new corporate charter 

You will not need a new EIN if any of the following applies: 

– You are a division of a corporation 

– After a corporate merger, the surviving corporation keeps using its existing EIN 

– A corporation declares bankruptcy. However, if a liquidating trust is set up for a corporation in bankruptcy, that trust needs its own EIN. 

– The corporation’s name changes 

– You change location or add locations (stores, plants, businesses or branches) 

– You elect to be taxed as an S corporation by filing Form 2553 

– After a corporate reorganization, only the identity, form or place of organization changes 

– The corporation is sold and the buyer acquires its assets, liabilities and charter