FastCounsel

Detailed Answer

Why an Estate Needs an EIN

When a person dies, their estate often holds assets—bank accounts, investments, rental property—that generate income. The Internal Revenue Service (IRS) requires estates and certain trusts to have their own Employer Identification Number (EIN). You use the EIN to file federal estate tax returns, fiduciary income tax returns, open estate bank accounts, and pay any taxes or debts.

Executor’s Authority Under Vermont Law

Under Vermont probate law, an executor named in the will (called a personal representative) manages the decedent’s estate. See 14 V.S.A. § 4501 (legislature.vermont.gov). Your role includes collecting assets, paying debts, and filing tax returns.

Step-by-Step: Applying for an EIN

1. Gather Key Information:
   • Decedent’s full legal name and Social Security Number.
   • Decedent’s date of death.
   • Executor’s name, address, and SSN or EIN (if you already have one).
   • Estate’s “responsible party” information—this is usually you, the executor.
   • Estate’s mailing address.
2. Choose Your Filing Method:
   • Online (fastest): Go to IRS.gov and search “EIN Online.” Complete the Form SS-4 online. You receive the EIN immediately. See the IRS guide: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
   • Fax: Complete Form SS-4 and fax it to the appropriate IRS fax number (855-641-6935 for estates). The IRS returns your EIN by fax within four business days.
   • Mail: Send a completed Form SS-4 to the IRS Cincinnati Service Center—Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. Processing can take up to four weeks.
   • Phone (international applicants only): Call 267-941-1099 (not toll-free) to receive an EIN by phone.
3. Complete Form SS-4: Fill in boxes for “Estate of [Decedent’s Name],” select “Estate” as the entity type, and enter the date of death. For “Reason for Applying,” check “Banking purposes” or “Compliance with IRS withholding requirements.”
4. Receive Your EIN: Keep the confirmation letter or notice in your permanent estate records. Use this EIN for all federal filings and to set up any estate bank or brokerage accounts.

State Tax Filings in Vermont

Even though the EIN comes from the IRS, you may need to file Vermont state returns if the estate earns income. Vermont requires a fiduciary income tax return (Form IN-111) when an estate earns over $1,200 in income. See 32 V.S.A. § 5862 (legislature.vermont.gov).

Vermont also imposes an estate tax on larger estates. If the gross estate exceeds the Vermont threshold, file the Vermont Estate Tax Return (Form VT-706). See 32 V.S.A. § 4081 (legislature.vermont.gov).

Helpful Hints

• Apply online whenever possible for instant processing.
• Double-check all names, Social Security Numbers, and dates before submission.
• Keep copies of Form SS-4 and all correspondence with the IRS.
• Use the EIN only for estate-related banking, tax, and investment activities.
• Consult a tax professional if the estate generates significant income or if you must file both federal and state returns.