Do I Need an EIN for a Side Hustle?
Most side hustlers don't legally need an EIN — but getting one protects your Social Security number and makes opening a business bank account easier. Here's how to figure out if you need one.
Bizee Editorial Staff
Editorial Team
Introduction
Most side hustlers don't legally need an Employer Identification Number (EIN) — but that doesn't mean you shouldn't get one. Whether you're freelancing, driving for a gig platform, or selling online, an EIN can protect your Social Security number and make it easier to open a business bank account.
What is an EIN?
An Employer Identification Number (EIN) is a 9-digit tax ID the IRS assigns to identify a business entity for federal tax purposes. Think of it as a Social Security number for your business. The IRS issues EINs at no cost, and you can apply online at irs.gov.
Despite the name, you don't need employees to get one. Sole proprietors, single-member LLCs, freelancers, and gig workers can all apply. Most people who run a side hustle are surprised to learn the application takes about 15 minutes and the EIN is issued the same day.
Do you need an EIN for a side hustle?
It depends on how your side hustle is structured. Most sole proprietors running a side hustle without employees are not required to get an EIN — they can use their Social Security number for federal tax purposes instead. But a few situations make an EIN required, not optional.
When an EIN is required
- You have employees — even one part-time hire triggers the requirement
- Your side hustle is structured as a partnership or corporation
- You file employment, excise, alcohol, tobacco, or firearms tax returns
- You formed an LLC and want it taxed as a corporation or S Corporation
If any of these apply, you need an EIN before you file. Using your Social Security number in those situations isn't an option.
When an EIN is not required
If you're a sole proprietor with no employees — freelancing, consulting, selling handmade goods, or doing gig work — you're not required to get an EIN. You can file taxes using your Social Security number and report your side hustle income on Schedule C with your Form 1040.
Single-member LLCs that are disregarded for tax purposes also don't need an EIN unless they have employees or meet other specific criteria. That said, most banks will ask for one when you open a business bank account — so even if the IRS doesn't require it, your bank might.
Why getting an EIN still makes sense
Even when it's not required, getting an EIN is one of the smarter early moves for a side hustle. It keeps your Social Security number off client invoices, 1099 forms, and W-9 requests — and that matters more than most people realize until they've handed their SSN to a dozen different clients.
Plus, an EIN makes it easier to open a dedicated business bank account. Keeping your side hustle income separate from your personal finances isn't just good practice — it makes tracking deductible expenses and filing taxes much cleaner at the end of the year.
If your side hustle earns $400 or more in net income, you'll need to file Schedule SE and pay self-employment tax — which covers Social Security and Medicare at a combined rate of 15.3%. An EIN doesn't change that obligation, but having your finances organized from the start makes the process far less painful.
FAQ
Yes, in most cases it's worth getting one even if it's not required. An EIN keeps your Social Security number off client paperwork, makes it easier to open a business bank account, and positions your side hustle as a real business if you decide to form an LLC or hire help later. The IRS issues EINs at no cost, and the online application takes about 15 minutes.
The IRS receives copies of 1099-NEC and 1099-K forms that clients and payment platforms file on your behalf. If you earn $600 or more from a single client, they're required to send you — and the IRS — a 1099-NEC. Payment platforms like PayPal and Venmo also report business transactions above certain thresholds. If the income on those forms doesn't match your return, the IRS can come looking.
Generally, no — not if you're a sole proprietor with no employees. Self-employed individuals can use their Social Security number for federal tax purposes. But if you have employees, operate as a partnership or corporation, or file certain excise tax returns, an EIN is required. Even without a legal requirement, many self-employed people get an EIN to protect their Social Security number and open a business bank account.
It depends on how your LLC is taxed. A single-member LLC that's disregarded for tax purposes doesn't need an EIN unless it has employees or meets other specific IRS criteria. But if your LLC is taxed as a corporation or S Corporation, an EIN is required. And regardless of the legal requirement, most banks will ask for an EIN before opening a business bank account for your LLC.
Yes. Sole proprietors — including freelancers and gig workers who haven't formed an LLC or corporation — can apply for an EIN. You don't need a registered business entity to get one. The IRS issues EINs to individuals running a business under their own name, and the application is free through the IRS website.
Yes, if you expect to owe $1,000 or more in federal taxes for the year. The IRS requires self-employed individuals to make estimated tax payments four times a year rather than waiting until the annual filing deadline. If you skip estimated payments and owe at year-end, you can be on the hook for underpayment penalties on top of the tax itself.
