Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed Colorado attorney for guidance specific to your situation.
Detailed Answer
When someone passes away, the executor (also known as the personal representative) often needs an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) to manage the estate’s financial affairs. An EIN functions like a Social Security number for the estate. It allows the estate to open bank accounts, file tax returns, and pay debts.
Under Colorado law, the executor has a fiduciary duty to gather assets, pay creditors, and distribute remaining property to heirs (C.R.S. § 15-12-706). Obtaining an EIN is an early step to ensure compliance with both state and federal requirements.
- Determine the need for an EIN. If the estate will earn income (e.g., interest, dividends, or rental income), or if a bank requires an EIN to open an estate account, you must apply.
- Gather required information. You will need the decedent’s full name, Social Security number, date of death, the executor’s name and address, and the estate’s mailing address.
- Choose your application method. The IRS offers several ways to apply:
- Online: Complete the EIN application at the IRS website and receive the number immediately. See “Apply for an Employer Identification Number (EIN) Online” at www.irs.gov.
- Phone (international applicants only): Call 267-941-1099.
- Fax: Send a completed Form SS-4 to the appropriate fax number listed on the IRS instructions and receive the EIN by fax within four business days.
- Mail: Mail a completed Form SS-4 to the IRS address listed in the instructions. Processing takes about four weeks.
- Complete and submit Form SS-4. On Line 1, check the box for “Estate of a Deceased Individual.” Fill lines 2–10 with the estate’s information. Sign and date the form.
- Keep records. Record the EIN in your estate files. Provide it to financial institutions when opening accounts or transferring assets.
Once you receive the EIN, use it on all estate-related tax filings, including any federal estate tax return (if required) and the estate’s income tax returns (Form 1041).
Helpful Hints
- Apply online whenever possible to get your EIN immediately.
- Ensure the executor’s name and address match the name on the court’s Letters Testamentary.
- Keep a copy of the submitted Form SS-4 and any correspondence with the IRS in your permanent estate records.
- If you make an error on the application, contact the IRS’s Business & Specialty Tax Line at 800-829-4933 for corrections.
- Colorado does not impose a state inheritance tax, but federal estate tax may apply if the estate’s value exceeds federal thresholds.