Q. Do a husband and wife who wish to open a Joint Venture Account need to obtain a separate employer identification number (EIN) for the joint venture?
A. No, not if the joint venture is a “qualified joint venture.” An unincorporated business jointly owned by a married couple is generally classified as a partnership for Federal tax purposes. However, for tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 provides that a “qualified joint venture,” whose only members are a husband and a wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes. As a result, the social security number of either spouse may be used for tax purposes.
A qualified joint venture is a joint venture involving the conduct of a trade or business, if: (1) the only members of the joint venture are a husband and wife who file a joint return; (2) both spouses materially participate in the trade or business; and (3) both spouses elect not to be treated as a partnership. See Election for Husband and Wife Unincorporated Businesses at the IRS website (www.irs.gov) for more information and directions on how to make the election to be treated as a qualified joint venture.