SMLLC becomes MMLLC-New EIN Needed?
Question: I added a second member to my Single Member LLC which already had an EIN.
Since I am now a Multi Member LLC, which is required to file a 1065 Partnership tax return, am I also required to get a new EIN?
Answer: Nope.
Below is a snippet from the IRS “When to get new EIN” Guide:
For an LLC you need a new EIN if you create a NEW (from day 1 of setup to file taxes you need an EIN in these situations)
- LLC that's going to be a Corp or S-Corp
-LLC that needs an EIN for payroll even if SMLLC
-LLC with multiple members
Making a brand new one of any of those LLC's requires a new EIN specific to that new LLC.
Changing from single member to multi once after the LLC is established, or changing from being taxed as disregarded to taxed as S-Corp does not require a new EIN. It's the same LLC. You're just changing your tax status.
An LLC isn't really tangible to the IRS. It's a state established creation.
So the IRS is just saying for filing purposes, you need an EIN for these situations : (Lists the versions of LLC's that need an EIN from day one to file for tax purposes).
A single member LLC doesn't NEED an EIN from day one for tax filing purposes (if it's just a disregarded SMLLC with no payroll) BUT it can choose to have an EIN. It's optional.
Single Member LLC = EIN is Optional
Multi member LLC= EIN is Required
Situation 1: SMLLC with EIN —-> MMLLC
Do you need an EIN? Yes
Do you have an EIN? Yes
Do you need a new EIN? No, you literally already have.
Situation 2: SMLLC without an EIN —> MMLLC
Do you need an EIN? Yes
Do you have an EIN? No
Do you need a new EIN? Yes. As a MMLLC you need one, and you don’t already have one.
Think of It Like This:
If travel regulations say you need a passport to fly to Spain.
But previously you'd flown to Japan. It doesn't mean you need a new passport to go to Spain.
You've already done something which caused you to obtain the thing need to go to Spain.
If you need an EIN to file a LLC on form 1065; and you already have an LLC with an EIN; you've met the requirement.
Any LLC with an EIN retains that EIN if its classification changes under the entity classification regulations. Treas. Reg. §301.6109-1(h)(1)
If an LLC treated as a disregarded entity is later recognized as a separate entity for federal tax purposes and it has an existing EIN, it continues to use that EIN. If the LLC does not have an EIN, it must acquire an EIN and not use the owner's TIN. See Treas. Reg. §301.6109-1(h)(2)(ii).
Here's that Code Section:
"(ii) When an entity that was disregarded as an entity separate from its owner becomes recognized as a separate entity. If a single owner entity's classification changes so that it is recognized as a separate entity for federal tax purposes, and that entity had an EIN, then the entity must use that EIN and not the TIN of the single owner. If the entity did not already have its own EIN, then the entity must acquire an EIN and not use the TIN of the single owner."