Detailed Answer
When an individual named executor (also called personal representative) needs to administer an estate in Alabama, the first federal requirement is to obtain an Employer Identification Number (EIN) for the estate. The EIN functions as the estate’s taxpayer identification number for filing estate income tax returns, paying debts, and distributing assets.
1. Secure Your Letters Testamentary or Letters of Administration
Before you can apply for an EIN, you must be officially appointed by the Alabama probate court. The court issues Letters Testamentary if there’s a will, or Letters of Administration if there’s no will. Under Alabama law, see Ala. Code § 43-2-840, the court must find you qualified and appoint you as executor or administrator. You’ll receive certified copies of your letters, which you’ll need when applying for the EIN.
2. Complete IRS Form SS-4
Once you have your letters, complete the IRS’s Form SS-4, Application for Employer Identification Number. Key items include the decedent’s name and Social Security number, your name and title (Executor), the date the estate was opened (date of death or appointment), and the estate’s mailing address. You must also indicate the reason for applying (“Estate” in Line 10).
3. Submit the Form to the IRS
You can apply for the EIN in one of three ways:
- Online: The fastest option is the IRS EIN Online Assistant at IRS Online EIN Application. You receive the EIN immediately upon completion.
- By Fax: Fax your completed Form SS-4 to the appropriate IRS fax number (listed on the form instructions). The IRS typically returns your EIN within four business days.
- By Mail: Mail Form SS-4 to the IRS address listed in the instructions. Allow roughly four to five weeks for processing.
4. Record and Use the EIN
After you receive the EIN, use it on:
- Estate income tax returns (Form 1041)
- Bank accounts and investments titled in the name of the estate
- Paying debts and filing employer tax returns if the estate has employees
Keep a copy of the EIN confirmation letter with the estate records and provide it to banks, brokers, and other financial institutions when opening accounts.
Helpful Hints
- Apply for the EIN only after receiving your letters from the probate court.
- Make sure the estate’s mailing address is accurate; you can update it later if needed.
- If you have questions about line items on Form SS-4, review the IRS instructions or contact the IRS Business and Specialty Tax Line at 800-829-4933.
- Keep a paper and digital copy of your EIN application and confirmation for your records.
- Using expedited electronic filing greatly reduces processing times.
Disclaimer: This article is for general informational purposes only and is not legal advice. Consult a qualified attorney for advice on your specific situation.