EIN for Parents: A Complete Guide to Getting Your Employer Identification Number

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How to Get an EIN (Employer Identification Number): What Parents Should Know

Family Employment • 4 min read

When launching a small business, establishing an LLC, or preparing to compensate your children for legitimate business-related tasks, securing an Employer Identification Number (EIN) from the IRS is one of the first essential steps you’ll need to complete.

This unique identifier serves as the foundation for all official business activities, from establishing business bank accounts to managing payroll operations. Parents exploring how to properly pay their children for business work often find that obtaining an EIN is a mandatory requirement in the process.

Here’s an overview of what an EIN is, why it’s important, and the various methods available for obtaining one.

What Is an EIN?

An Employer Identification Number is a unique identifier assigned by the Internal Revenue Service to businesses—essentially functioning like a Social Security Number, but specifically for your company entity.

You’ll utilize your EIN for various business operations including:

  • Employing workers (including paying your children for business-related tasks)
  • Establishing business banking relationships
  • Completing tax filings
  • Processing payroll
  • Generating W-2 forms
  • Protecting your personal Social Security Number from appearing on business documents

If you’re operating a legitimate business or intend to pay your child through your business, obtaining an EIN is typically necessary.

Who Needs an EIN?

You will need an EIN if:

  • You operate as an LLC, partnership, C-Corp, or S-Corp
  • You intend to hire any employees, including your child
  • You want to open a business bank account
  • You desire separation between your personal and business financial matters
  • You need to issue a W-2 to your child for legitimate business work

You may not need an EIN if you’re a sole proprietor with no employees, though many business owners still choose to obtain one for enhanced privacy and more organized business record-keeping.

How to Apply for an EIN (DIY Option)

You can submit your application directly through the official IRS website. The application process will ask you to provide information about:

  • Your business structure and legal entity type
  • The reason you’re applying for an EIN
  • Details about the responsible party
  • Your business address
  • Ownership and control information

The IRS online system can be quite specific about formatting requirements, timing constraints, and certain response patterns. If any information doesn’t match exactly as expected, your application may be rejected and require additional follow-up communication.

For many first-time business owners, the technical terminology and business structure questions can be particularly confusing, especially when dealing with family-owned businesses or single-member entity setups.

Common Issues People Run Into

Parents and new business owners frequently encounter challenges such as:

  • Uncertainty about which business structure option to select
  • Application rejections due to address or naming inconsistencies
  • Unclear language regarding responsible party definitions
  • Confusion about whether they are technically “hiring employees”
  • Needing to obtain a new EIN after forming an LLC
  • Concerns about submitting incorrect information
  • IRS website availability and technical limitations

These challenges are quite common—the system was originally designed for accounting professionals, not parents attempting to establish a small family business operation.

Why Parents Especially Care About EINs

If you want to pay your child for real work performed in your business, the IRS requires several key components:

  1. A legitimate business operation
  2. A valid Employer Identification Number
  3. Age-appropriate tasks and responsibilities
  4. Reasonable compensation rates
  5. Detailed records of work performed
  6. A W-2 form issued at year-end

The EIN enables you to run payroll correctly and maintains everything organized, compliant, and properly documented.

How Roth Wizards Supports the Rest of the Process

Once you have your EIN, Roth Wizards assists with:

  • Tracking the tasks your child performs
  • Maintaining a record of payments made
  • Documenting work for IRS compliance requirements
  • Staying organized for year-end W-2 generation

Roth Wizards serves as your comprehensive “evidence file” for your child’s work—simple, intuitive, and consolidated in one convenient location.

Prefer Not to Handle the EIN Process Yourself?

Some families choose to apply directly through the IRS, while others prefer to avoid dealing with the paperwork, business structure questions, or the risk of making mistakes during the application process.

If you’d like assistance with this process, we offer a done-for-you EIN filing service that handles the complete application and all IRS interactions on your behalf. Simply provide the required information, and we take care of the rest.

Final Thoughts

An Employer Identification Number represents a fundamental step for anyone who wants to operate a business or pay their child for legitimate work. Whether you choose to apply directly or utilize a guided service, securing your EIN opens the door to payroll processing, business banking, tax compliance, and much more.

If you need help or prefer not to navigate the IRS system independently, we’re here to handle it for you.