How To Get A EIN (Tax ID) Number In Massachusetts
Massachusetts has one of the most highly educated workforces in the country, but unfortunately, the Commonwealth also has one of the highest costs for business formation. To protect your finances, you need to ensure that you navigate the process carefully and that you don’t overlook any requirements. In particular, you will need to obtain a federal Employer Identification Number (EIN) and a Massachusetts tax ID number.
Wondering how to get an EIN? Curious about state tax ID numbers? Then, this guide is designed for you. To get a state ID or EIN number Massachusetts business owners need to do the following.
How To Apply For A Tax ID Number In Massachusetts
To apply for a Massachusetts EIN number, you need to gather information about your business. Then, you need to fill out a short application which you can submit online or through the mail. Once you finish these steps, you will receive your number, and you can start using it as soon as you get it. Keep reading for a closer look at the process.
Before applying for an EIN number, Massachusetts business owners should review the following list. If any of these elements apply, you need this number:
- You’re getting ready to hire your first employee.
- You’re bringing on a contractor and you need to withhold taxes from their pay.
- You don’t need to withhold contractor pay, but you prefer to put an EIN on your contractors’ 1099-NEC forms instead of your Social Security Number.
- You’re changing the structure of your business. For instance, you’re switching from a partnership to a corporation.
- You’re buying an existing business — If so, you cannot use their EIN.
- You want to open a business bank account or apply for a loan in your business’s name.
Keep in mind that EINs aren’t just for businesses in Massachusetts. They are also for nonprofits, churches, trusts, retirement accounts, and some other types of entities.
Prepare The Required Information
To get your EIN, you need basic contact details for your business. You also need to be able to answer the following questions:
- Who is the responsible party? This must be an individual who can make financial decisions for the business. Generally, they should have an ownership interest.
- How many employees do you think the business will have in the next 12 months? This is just an estimate. You are not bound by this number.
- Are any of your employees household employees or agricultural employees?
- Do you think that the business will owe less than $1,000 in payroll taxes this year? If so, would the business like to file payroll taxes annually instead of monthly?
- Why are you applying for an EIN?
Once you have the answers to those questions, you can continue to the next step.
The online EIN application lets you enter the above details at your convenience. Once you’re done, you hit submit, and the system should generate a number relatively quickly.
Submit Your Application Via Mail
If you have more time, you may want to do the application process through the mail. It takes six to eight weeks to get an EIN number if you apply by sending a copy of Form SS-4 to the IRS. However, you can also opt to fax in the form — that will speed up the process by a couple of weeks.
Frequently Asked Questions
At this point, most people still have questions. In particular, new business owners want to know about the difference between a state and federal ID. Here is what you need to know.
An EIN is a federal tax ID number, but there are also state tax ID numbers. Most businesses in Massachusetts need an EIN and a Massachusetts tax ID number.
The Secretary of State does not issue EIN numbers in Massachusetts. To get an EIN number, Massachusetts business owners need to contact the IRS. Once they have this number, they can contact the state to get a state ID.
A Massachusetts EIN number is not the same as a Massachusetts tax ID number. While an EIN is issued by the IRS, a state tax ID comes from the MA Department of Revenue. When you file federal tax returns for your business, you will use the EIN. For state returns, you will use a state number.