Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for advice on your specific situation.
Detailed Answer
When someone passes away, the court usually appoints an executor (personal representative) to manage the estate. One of the first tasks is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN serves as a Social Security number for the estate. You need it to open bank accounts, file tax returns, and pay debts on behalf of the estate.
1. Determine the Need for an EIN
You must obtain an EIN if the estate will:
- Generate income after the decedent’s death (e.g., rental property, dividends).
- Hold assets in a bank or brokerage account in the estate’s name.
- File a federal estate tax return (Form 706) or income tax return (Form 1041).
2. Prepare Required Information
- Name of the decedent and date of death.
- Executor’s name, mailing address, and Social Security number.
- Estate’s name (“Estate of [Decedent’s Name]”).
- Reason for applying (check “Probate estate” on Form SS-4).
- Estimated date estate will start business activity (if any).
3. Complete IRS Form SS-4
Use IRS Form SS-4, Application for Employer Identification Number. You can download the form and instructions here: IRS Form SS-4.
4. Submit the Application
Executors have three delivery options:
- Online: Immediate EIN issuance via the IRS website: Apply for an EIN Online.
- Fax: Fax the completed SS-4 to the IRS (check current fax number in instructions). You’ll usually receive the EIN within four business days.
- Mail: Mail the form to the IRS address listed in the SS-4 instructions. Processing can take 4–6 weeks.
5. Use the EIN
Once you receive the EIN, you can:
- Open an estate bank or brokerage account.
- File the decedent’s final individual income tax return (Form 1040) if required.
- File the estate’s federal income tax return (Form 1041) for income generated after death.
- Manage payroll if the estate has employees.
Texas Law on Executor Authority
Under Texas law, executors (personal representatives) have broad authority to manage estate affairs, including tax matters. See Texas Estates Code § 401.001 (capitol.texas.gov).
Helpful Hints
- Obtain multiple copies of the death certificate. Institutions often request originals.
- Keep thorough records of all estate transactions using the EIN.
- Confirm the executor’s appointment order from the probate court before applying.
- If you miss online hours, apply early in the week to avoid weekend delays.
- Consult a probate attorney or tax professional if the estate’s tax matters are complex.