Under reporting requirements established by Expenditure Category 1.8 and 2.29, how can a municipality submit reporting data for a small business beneficiary that has been awarded over $50,000 when the small business does not have an EIN or TIN?

If a small business beneficiary has been awarded over $50,000 and does not have an Employer Identification Number (“EIN”) or Tax Identification Number (“TIN”), the awarding municipality should encourage the small business beneficiary to request an EIN from the Internal Revenue Service (“IRS”) to satisfy reporting requirements.

The Final Rule adopts the Uniform Guidance definition of a beneficiary specifying “that households, communities, small businesses, nonprofits, and impacted industries are all potential beneficiaries of projects carried out with [Coronavirus State and Local Fiscal Recovery Funds “CSLFRF”)] funds.”[1]

Expenditure categories 1.8 COVID-19 Assistance to Small Businesses and 2.29 Loans or Grants to Mitigate Financial Hardship [to Small Businesses] have additional reporting requirements. Both require the recipient to report whether projects are primarily serving disproportionately impacted communities[2] as well as the number of Small Businesses served.[3]

Treasury’s Project and Expenditure Report User Guide clarifies reporting requirements for beneficiaries by explaining that “similar to reporting under the Coronavirus Relief Fund (“CRF”), information on both beneficiaries and subrecipients will be collected in a single form in the Project and Expenditure Report.”[4] In the Subrecipients, Beneficiaries, or Contractor section of the Report, information is collected “about each subrecipient, contractor or beneficiary that has received at least one Subaward or Direct Payment obligation of federal funding greater than or equal to $50,000 to execute projects supporting the CSLFRF program.”[5] This includes “at least one of the following two identifiers for a subrecipient: a UEI (Unique Entity Identifier), or TIN.”[6]

Generally, a business also needs an Employer Identification Number (“EIN”), also known as a Federal Tax Identification Number (“TIN”) if it does any of the following:

• Pays employees;
• Operates as a corporation of partnership;
• Files tax returns for employment, excise, or alcohol, tobacco, and firearms;
• Withholds taxes on income, other than wages, paid to a non-resident alien;
• Uses a Keogh Plan (a tax-deferred pension plan); and
• Works with certain types of organizations.[7]

If the company is operating as a sole proprietorship the Internal Revenue Service (IRS) states:

A sole proprietor without employees and who doesn't file any excise or pension plan tax returns doesn't need an EIN (but can get one). In this instance, the sole proprietor uses his or her social security number (instead of an EIN) as the taxpayer identification number.[8]

Per Federal requirements, “eligible recipients are required to have an active registration with the System for Award Management (“SAM”) (https://www.sam.gov) pursuant to 2 CFR Part 25. The “UEI” is the identification number given to an entity when registering in SAM.gov.”[9] Recipients must also evidence “a given beneficiary, subrecipient, or contractor’s eligibility, including a valid SAM.gov registration (except with respect to individuals or households for which a SAM.gov registration is not required).”[10] As such, the Small Businesses receiving assistance under this program must have a UEI.

As the Treasury reporting requirements only require a UEI or a TIN, the UEI may be used in place of the TIN. In either instance, it is recommended to encourage the business to apply for an EIN through the IRS website.[11] It is a free service, and the EIN is assigned immediately.

Last Updated: March 6, 2023