Key Takeaways

  • A Massachusetts tax ID number may refer to both the federal Employer Identification Number (EIN) issued by the IRS and state-issued IDs, such as the Massachusetts Department of Revenue’s Sales and Use Tax ID or the State Income Tax Withholding ID.
  • Most businesses in Massachusetts need an EIN to hire employees, open business bank accounts, or file federal and state taxes.
  • Massachusetts also requires additional state tax registrations for businesses that sell taxable goods, have employees, or are subject to excise or withholding taxes.
  • Applying for an EIN is free and can be done online, by fax, phone, or mail through the IRS.
  • Since 2021, Massachusetts businesses must also obtain a State Income Tax ID in addition to other registration numbers.
  • Failure to obtain or properly use tax ID numbers can lead to penalties, delayed tax filings, or compliance issues.

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. 

Federal vs. State Tax ID Numbers in Massachusetts

In Massachusetts, the term “tax ID number” can mean different things depending on the context. Businesses typically need both:

  • Federal Employer Identification Number (EIN): Issued by the IRS, this is a nine-digit identifier for your business, similar to a Social Security Number for individuals. It is required for most business structures, including corporations, partnerships, multi-member LLCs, and any entity with employees.
  • Massachusetts State Tax ID Numbers: Issued by the Department of Revenue (DOR), these cover state-level obligations, such as Sales and Use Tax, Meals Tax, Room Occupancy Tax, or Employer Withholding Tax.
  • Massachusetts State Income Tax ID: As of 2021, the state requires businesses to obtain a separate State Income Tax ID for withholding income tax from employees’ wages.

Understanding the difference ensures you remain compliant with both federal and state tax regulations.

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. 

Additional Situations Requiring a Massachusetts Tax ID Number

In addition to standard requirements, Massachusetts businesses may also need a tax ID number in the following cases:

  • Nonprofit organizations: Even nonprofits generally need an EIN to apply for tax-exempt status with the IRS and to handle payroll if they hire staff.
  • Trusts and estates: Fiduciaries managing trusts, estates, or pension plans must obtain an EIN.
  • Excise tax obligations: Companies engaged in industries like alcohol, tobacco, or fuel often need specialized Massachusetts excise tax registrations.
  • Business expansion: Opening additional locations or changing ownership may require updating or applying for a new state tax ID number.

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

Benefits of a Massachusetts Tax ID Number

Beyond compliance, holding a Massachusetts tax ID number offers practical advantages:

  • Business credibility: Vendors, banks, and clients often require a tax ID to establish formal relationships.
  • Streamlined banking: Most banks require an EIN to open a business account, apply for credit, or secure loans.
  • Hiring compliance: Employers must provide tax ID information when reporting wages and paying employee withholding taxes.
  • Tax return accuracy: Proper ID numbers help avoid delays and errors in federal and state tax filings.
  • Ease of growth: Having the correct IDs in place makes expanding operations or applying for licenses more efficient.

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. 

Massachusetts State Registration Process

Once you have your federal EIN, you must register with the Massachusetts Department of Revenue (DOR) for a state tax ID number if your business:

  • Sells taxable goods or services.
  • Has employees subject to Massachusetts income tax withholding.
  • Is liable for other state-level excise or use taxes.

The application can be completed online through the MassTaxConnect portal, which allows businesses to:

  • Register for one or multiple tax accounts simultaneously.
  • File and pay taxes electronically.
  • Manage employee withholding obligations.

Processing times vary, but online registration is generally the fastest. Businesses should keep confirmation records, as the state ID will be necessary for filings and payroll compliance.

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. 

Compliance and Penalties for Missing Tax IDs

Failing to obtain or use the correct Massachusetts tax ID number can have serious consequences. Businesses may face:

  • Penalties and fines: For failing to register or remit state taxes.
  • Delayed tax filings: Missing or incorrect ID numbers can cause rejection of tax returns.
  • Payroll issues: Without proper withholding IDs, employers cannot legally withhold and remit taxes from employees.
  • Loss of good standing: Corporations and LLCs that fail to comply risk administrative dissolution or loss of liability protections.

Staying compliant requires keeping tax ID numbers current, especially if your business changes structure, ownership, or industry classification.

Frequently Asked Questions

  1. Do all businesses in Massachusetts need a tax ID number?
    Yes, nearly all businesses need a federal EIN, and many also require state tax IDs for sales, withholding, or excise taxes.
  2. Is applying for a Massachusetts tax ID number free?
    Yes, both the federal EIN (via the IRS) and state registrations (via MassTaxConnect) are free to apply for.
  3. What is the new Massachusetts State Income Tax ID?
    Since 2021, employers must obtain this ID to withhold and remit employee state income taxes.
  4. Can I use my Social Security Number instead of an EIN?
    Sole proprietors without employees may use their SSN, but an EIN is strongly recommended for banking, hiring, and privacy.
  5. How long does it take to receive a Massachusetts tax ID?
    Federal EINs can be issued immediately online. State IDs issued through MassTaxConnect are typically processed within a few days.

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