If you are required to report employment taxes or issue tax statements, who must obtain the federal Employer Identification Number?

If you are required to report employment taxes or issue tax statements, who must obtain the federal Employer Identification Number?

• A. The Employee
• B. The City
• C. The Employer
• D. The Bank

Answer: (C)

The business that hires and pays workers must obtain the federal Employer Identification Number. This number identifies the employer on all payroll tax reporting and on tax statements issued to employees, such as W-2s. The employer uses the EIN on forms like the quarterly payroll tax return and the annual unemployment tax return. Employees report their taxes using their own Social Security Numbers, not an EIN. The city or a bank aren’t the entities responsible for payroll tax reporting for employees.

The business that hires and pays workers must obtain the federal Employer Identification Number. This number identifies the employer on all payroll tax reporting and on tax statements issued to employees, such as W-2s. The employer uses the EIN on forms like the quarterly payroll tax return and the annual unemployment tax return. Employees report their taxes using their own Social Security Numbers, not an EIN. The city or a bank aren’t the entities responsible for payroll tax reporting for employees.