Switching Tax Status as an LLC

by | Jun 11, 2022

Switching Tax Status as an LLC? Do you need a new EIN?

People wonder if they are electing to change the tax status of their LLC, do they need to get a new EIN from the IRS? Generally the answer is no, that as along as you complete the proper filings, you do not need to get a new EIN.

The first and most common example is switching from an LLC taxed as a sole proprietor to an LLC taxes as an S Corp. In these situations a new EIN would not be needed. However, it becomes more questionable when an LLC taxed as a sole proprietor is switching tax status to a partnership. This would mean that the LLC is adding another member to the business. The tricky part here is that is would all depend based off of how the business was formed with the state and state laws.

If there are restrictions on adding a new member to the LLC, you might need to dissolve the business and open another one with a new EIN to add the new member and get partnership tax status. The first example of switching from a sole prop to an S Crop was under the assumption that no new owners would be added. If a new member would be added, this would need to be review as well.

Contact us and we would be able to assist you with changing tax status.

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Don’t hesitate to contact your Minnesota Tax Attorneys at Wildes at Law for any tax planning, business, tax preparation and other tax services.