Federal Employer Identification Number (FEIN)

All companies who have hired an employee should apply for an FEIN with the IRS—this includes people hiring themselves and paying themselves wages. 

• Businesses: Sole proprietors, partnerships, corporations, and Limited Liability Companies (LLCs) with multiple members.
  • A sole proprietor with no employees may still be required to obtain an FEIN if any of the following criteria apply:
    • You have a Keogh plan (retirement plan for self-employed people);
    • You have an excise tax filing requirement (taxes paid when purchases are made on a specific good, such as gasoline).
      
      • If you don't know if you have this requirement, check with your financial advisor. 
    • You have to file employment tax returns, including returns to report backup withholding.
      • Back up withholding is required to be withheld from some contractor payments—Gusto does not currently support contractor withholding, so you'd need to pay those contractors outside of Gusto and issue separate 1099s. 
      • If you're a sole prop paying a contractor that's subject to back up withholding, you're still required to obtain a FEIN.
        • In Gusto, you should use this FEIN (rather than your SSN) to pay other contractors and future employees.  
• Non-Profit Organizations: Charities, foundations, religious institutions, social clubs, and associations.
• Estates and Trusts: Estates established after an individual's death and various types of trusts.
• Employers: Any entity hiring employees, including businesses and non-profits.

If you plan to hire at least one employee in the future, we recommend applying for a FEIN as soon as possible—this helps avoid delays and errors down the road. Before you'll be able to pay your first employee in Gusto, you'll need to do all the following:

1. Apply for an FEIN with the IRS—make sure your company details are accurate on the application (name, address, etc).
2. Complete your company onboarding in Gusto and add your FEIN—this includes e-signing a Reporting Agent Authorization form (8655). 
   • If company details change down the road, you may need to re-sign this form. 
3. Use your FEIN to register for any applicable state or local agencies.
   • You may also need to authorize Gusto (as your Third-Party Agent or Power of Attorney) with certain agencies so we can pay and file your taxes—learn how in the applicable state registration page. 

There is no risk or harm in registering for a FEIN before hiring your first employee—if you think it's time to hire a payroll company, it's probably a good indication you should register. However, while early registration is generally beneficial, businesses should assess their specific needs and consult with a financial advisor if uncertain.

If a filing has failed, or your payroll is blocked in Gusto, we'll let you know why on your Home page, or by email. If the information below doesn't help solve the problem, try our payroll blocked troubleshooting tips article. 

Typically, if we've received a FEIN mismatch error, it's because the FEIN listed in Gusto (and used on our filings) does not match what an agency has on file. We see this happen most commonly in the below scenarios: 

• Change of ownership
  • If you've changed ownership after registering with state agencies, you may have let the IRS know and been issued a new FEIN. If you did not tell state and local agencies about the FEIN change, we're filing using the FEIN listed in Gusto, and they're not recognizing it (because they have a different FEIN on file). 
  • To fix: If a new FEIN is issued, re-register with state and local agencies using your new FEIN and close your old tax accounts. We recommend contacting the agency first to confirm how they'd like to handle it. 
• State/local registration form typo/error
  • If the FEIN in Gusto is correct, but the agency has a different number on file for any reason (typo, clerical error, etc), filings may fail.
  • To fix: Notify the state and provide proof from the IRS of your assigned FEIN so the state can:
    • Correct their records, and;
    • Move payments and returns to the correct company account. 
• Typo in Gusto
  • If the FEIN in Gusto is incorrect, filings may fail or you may not be able to run payroll until it's corrected.
  • To fix: Contact us from the Help section of your account and provide documentation from the IRS that shows your assigned FEIN so we can correct our records.