Does my trust need an Employer Identification Number (“EIN”)? | Burner Law Group

Whether your trust requires its own EIN depends on the type of trust that you have. An EIN, besides known as a union tax ID number, is a nine-digit number that the Internal Revenue Service ( “ IRS ” ) assigns to identify an entity for tax report purposes. An EIN functions like a social security number .
generally, revocable trusts do not need an EIN as they are grantor trusts and the hope ’ s income is reported on the tax recurrence of the hope godhead. If you have created a revocable trust, you may revoke the trust at any time and “ regain ” possession of the reliance assets. accordingly, a revocable trust is an extension of the grantor who created the trust. The grantor pays the income taxes generated by the revocable believe and uses the social security number of its grantor as its tax ID. Couples with a joint revocable trust both hold the ability to revoke the trust, either person ’ s social security system number can be used. A separate tax ID is necessary if they do not file taxes jointly .
A revocable trust becomes irrevocable at the grantor ’ s death. At that time, the trust requires an EIN, as the confidence can no long be associated with the asleep grantor ’ s social security issue. The reliance must file its own taxes.

Some life irrevocable trusts are besides grantor trusts and therefore taxed to the grantor barely like a revocable trust. While it is not required for these trusts to maintain a distinguish tax ID, it is sometimes a good theme to assign same. We normally assign a federal tax ID when we do Medicaid Asset Protection Trusts. If an irrevocable reliance is not classified as a grantor confidence, an EIN is required as the trust is considered a “ separate entity ” from the grantor.

If your hope requires an EIN, an application is submitted to the IRS deoxyadenosine monophosphate soon as possible. The application contains information from the grantor and the trust to answer a series of questions for the IRS. A trustee can either apply on-line, or mail/fax IRS Form SS-4. If a trustee applies on-line, the EIN is available in a matter of minutes. If the lotion is completed by facsimile or mail, it may take a few weeks to receive the EIN .
Discuss any questions relating to the want of a separate tax ID for your trust with an feel estate of the realm plan lawyer or tax adviser. Since the income tax rate for a trust is normally thus much higher than that for an individual, the motion of how your faith is taxed is crucial when considering trusts. If you are wondering if a believe is right for you – our estate planning attorneys are here to help .

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