Does a Trust Need a Tax ID Number?

9 Feb 2023
208 ITN FAQ ENTITY TRUST Does a Trust Need a Tax ID Number

Yes, a trust always needs “a tax ID number.” But sometimes its tax ID number is the grantor’s SSN and sometimes its tax ID number is a unique employer identification number (EIN). Revocable trusts fall under the grantor’s SSN: they are trusts that the grantor would be able to dissolve at any time, and is therefore under their financial control. Irrevocable trusts need their own EIN; they are trusts the grantor cannot alter without the approval of everyone else involved.

Sometimes, a trust account will start as a revocable trust and transfer to an irrevocable trust upon the grantor’s death. In this situation, it doesn’t start out needing its own EIN, but it will need one once the grantor passes.

Irrevocable trusts can also be created by a will.

Having its own EIN also means that the trust has to file its own tax returns, and it will be responsible for its own taxes. This is one of the core benefits of creating trust accounts, as it allows for better tax benefits for the grantor and their beneficiaries.