The ERISA consultants at the Retirement Learning Center Resource regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings plans. We bring Case of the Week to you to highlight the most relevant topics affecting your business.
A recent call with a financial advisor from Florida is representative of a common inquiry related to qualified retirement plan trusts. The advisor asked:
“Can a business owner use the company’s employer identification number (EIN) to identify the firm’s 401(k)?”
Highlights of Discussion
No, it is not recommended that a company use the same EIN number for the retirement plan trust as it uses for the business. An EIN is a 9-digit number (for example, 12-3456789) assigned to sole proprietors, corporations, partnerships, estates, trusts, and other entities for tax filing and reporting purposes. The business and the qualified plan trust are separate legal tax entities in the eyes of the IRS; therefore, each needs its own EIN.
To obtain an EIN for a retirement plan trust, the plan trustee can either apply online, mail or fax a copy of Form SS-4, Application for Employer Identification Number to the IRS.[1] For additional details on the process, please see the IRS post, How to Obtain or Re-Establish an EIN for a Retirement Plan Trust. The Instructions for Form SS-4 explain how to complete the SS-4 when seeking an EIN for a qualified plan trust. Additional information on EINs for retirement plans in contained in IRS Publication 1635, Employer Identification Number.
Conclusion
The IRS is clear that it wants qualified retirement plans—even for plans for owner-only businesses—to use a separate EIN for plan reporting purposes.
Any information provided is for informational purposes only. It cannot be used for the purposes of avoiding penalties and taxes. Consumers should consult with their tax advisor or attorney regarding their specific situation.
©2022, Retirement Learning Center, LLC. Used with permission.
