Updated October 28, 2020:

Tax ID Number MA: What Is It?

A tax ID number in MA is required to pay a business's licenses and fees. The Federal Tax ID or EIN is a number that is similar to a personal social security number. It has 9 digits and is broken down to 7+2 digits separated by a hyphen.

The Tax ID or Employer Identification Number (EIN) is assigned to all business entities by the IRS. 

An EIN is similar to a Social Security Number in that it has 9 digits. To differentiate an EIN from an SSN, there are 2 digits followed by a hyphen and then 7 more digits.

Simply put, the Tax ID Number serves the same purpose for businesses as the Social Security Number for individuals. The Employer Identification Number is assigned to all businesses,  whether or not they have employees. 

Tax ID Numbers can be used for the following purposes:

  • Opening business accounts
  • Submitting tax documents and reports
  • Managing payroll
  • Applying for business finance
  • Making applications for business licenses

You generally apply for the EIN after your LLC is approved by the department of state. 

Which Businesses Need a Tax ID Number MA?

Every entity planning to do business in Massachusetts needs to apply for a Federal Tax ID

Apart from the Tax Identification Number, required for all business entities, companies also need to apply for a State Sales Tax Number, if they sell products and collect sales tax. They need to incorporate sales tax in their pricing, and collect it from the buyers, before paying it back to the state. 

Why You Need a Tax ID Number 

Before you can apply for a Tax ID number, you need to have one of the following identification numbers:

  • Social security number
  • Taxpayer identification number

Further, you will need to obtain a business location in the United States to apply for a Federal Tax ID. 

There are different situations in which you will need to make an application for a Federal Tax ID, such as:

  • You recently incorporated
  • You created a trust or pension plan
  • You changed the legal charter or organizational structure, ownership of your business
  • You are hiring employees for the first time
  • You are opening a new bank account after the business owner deceased

How to Apply for an MA Tax ID Number?

To get your MA tax ID, you will need to complete your registration with the Massachusetts Department of Revenue. The application is necessary if the business is planning to do the following:

  • Hiring workers
  • Establishing a pension plan 
  • Selling or hiring items covered under the sales tax legislation

You cannot apply for a state tax ID unless you already have a Federal Tax Identification Number issued by the IRS. 

The easiest way of applying for a Federal Tax ID in Massachusetts is to fill out the relevant IRS-EIN-TAX-ID form and send it via the internet or by post. You can file a simplified application form as well. 

It is free to apply for an Employee Identification Number through the IRS. However, if you are confused about the process, you can get in touch with an experienced incorporation lawyer to give you advice. 

You can apply for an EIN in four ways:

  • By phone
  • Via fax
  • Through post
  • Online

To complete your application offline, you will need to fill out the SS-4, Application for Employer Identification Number form. If you send the form via fax, the processing time is four days. Online applications are processed faster. 

If you submit your application online, you will get a confirmation email back from the IRS the same day. 

You can also get your EIN number by calling the IRS Business & Specialty Tax Line on the following number: 800-829-4933. After you answer all the questions, you will receive a confirmation letter through the post. 

Responsibilities of Businesses

Apart from Federal and State ID numbers, you will also need to file for different taxes, depending on the type of your business. It is recommended that you talk to a tax attorney to find out more about the applicable regulations and tax requirements. 

The tax regulations of Massachusetts have recently changed. Apart from the state tax ID, some companies also need to obtain State Income Tax Withholding IDs, and the State Income Tax ID has been introduced, as well. 

If you need help with obtaining a Tax ID Number MA, you can post your job on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.