The change in Federal Employer Identification Number (FEIN) within the taxable year for payroll purposes is crucial due to the following reasons:
1. The Internal Revenue Service mainly goes by the FEIN. Changing FEIN means the company is already a new entity.
2. The payroll reports cannot be split out between the two FEINS at year end. The payroll data in Netsuite will not zero out if the FEIN is changed.
3. There is no field in NetSuite to set-up the effective date for a legal name change.
Below are some considerations for changing the FEIN in NetSuite:
For Single Instance users:
1. Open a new instance of NetSuite if change is done within the same taxable year.
2. Upgrade to One World where payroll users can create multiple subsidiaries. The payroll system treats each U.S. subsidiary as a separate legal entity thus can set-up several Employer Identification Number (EINs).
3. Continue for the remainder of the year with the original set-up and start using the new account data in January.
NOTE: In this case, the taxes and year to date information will not be reset to zero for the current taxable year. Timing is critical for this option. Please consult your tax advisor for your situation.
Steps for option 3:
a. Change the legal name and FEIN after the last payroll of the current year but before the first payroll of the new year. After changing the legal name and FEIN, update the payroll information.
b. Submit the required paperworks to Premier Payroll Service through NetSuite Customer Support.
NOTE: For all 3 options above, please contact your Account Manager for possible paperworks (such as Notice of Assignment, Name Change or Acquisition)
How to update FEIN in NetSuite:
1. Navigate to Setup > Company > Company Information > enter FEIN
2. Save
OR
1. Navigate to Setup > Company > Subsidiaries > edit Subsidiaries > enter FEIN
2. Save
For One World users:
Create a new subsidiary for the new legal entity.
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