When a trust is established, a Social Security Number (SSN) or an Employer Identification Number (EIN) is needed as a tax identification number. The type of trust established determines if you use an EIN or SSN when funding trusts. When you are seeking expert advice on trusts in Florida, The Law Office of Amy B. Van Fossen can help you and your loved one with these decisions.
SSN vs. EIN, What’s the Difference?
An SSN is an individual taxpayer identification number used to report income to the Internal Revenue Service for personal income tax purposes. Similarly, an EIN (Employer Identification Number) is a nine-digit number assigned to entities, like businesses. An EIN is also used for certain types of trusts, in order to report trust fund income and trust fund assets.
When Do I Need an EIN for a Trust?
Whether or not you need an EIN for a trust depends on the type of trust. Generally, grantor revocable trusts do not need an EIN. Any income taxes from a revocable trust is reported via the grantor’s SSN since the grantor can revoke the trust at any time and regain possession of the property. The grantor’s individual income report to the IRS remains connected to the trust assets and trust income.
In contrast, an EIN is required for an irrevocable trust. This is because the trust is a separate entity from the trust’s creator. Any income tax filings for trust income or trust assets are associated with the EIN.
EIN Quick Facts
- EINs are required for all irrevocable trusts including Medicaid trusts, special needs trusts, and certain testamentary trusts.
- If a grantor has several irrevocable trusts, each requires its own EIN.
- If a trustee is added, removed, or has a change in personal information (i.e. a name change) the EIN does not need to change.
- A change to the trust beneficiary does not require a change of EIN.
If you have questions about your specific trust needs in Florida, contact The Law Office of Amy B. Van Fossen. We can walk you through your options and determine the best plan for you and your loved ones. For more information about our services and expertise in trusts, estate planning, wills, elder care law, and more, see our blog.