Domestic EIN in Massachusetts – How to Obtain EIN in Massachusetts (original) (raw)

get an ein

An Employer Identification Number (EIN) also known as a Federal Tax Identification Number is an essential identifier issued by the Internal Revenue Service (IRS) for all businesses in Massachusetts. A nine-digit number serves as a unique identification for businesses enabling the IRS to track tax returns and payments among other financial transactions.

Massachusetts, also known as The Bay State, has immense opportunities for businesses. Be it an LLC (Limited Liability Company), sole proprietorship, partnership, or corporation – every business, located in Massachusetts, must obtain the EIN to conduct business in Massachusetts. This article comprehensively discusses obtaining domestic EIN in Massachusetts; its purpose; application process; requirements and related regulations.

What is a Domestic EIN in Massachusetts?

In Massachusetts, the process of obtaining an EIN for your LLC is relatively straightforward. However, there are certain requirements and steps that you need to follow to ensure compliance with state and federal regulations. In this article, we’ll cover the following topics:

What is an EIN?
When do LLCs in Massachusetts need an EIN?
How to obtain an EIN for your LLC in Massachusetts
Benefits of having an EIN for your LLC
Common mistakes to avoid when applying for an EIN
Frequently Asked Questions (FAQs)

A domestic EIN in Massachusetts refers to an Employer Identification Number given to enterprises that operate within Massachusetts or the United States or any of its territories. It is a distinct number sequence used as federal tax ID which helps IRS identify accurately and monitor businesses’ tax obligations. Unlike individual Social Security Numbers (SSNs), which are assigned to people alone in Massachusetts, EINs are designed specifically for organizational bodies.

If you’re starting an LLC in Massachusetts, you must obtain EIN for server purposes. Irrespective of the LLC’s management structure, EIN is mandatory for all types of LLCs, Corporations, Sole proprietorships, and other types of businesses.

The Purpose of a Domestic EIN

The main objective of having this type of identification among companies based in America can be summed up as follows: facilitating taxation administration and reporting. It becomes obligatory in various entrepreneurial activities like;

Hiring employees – If your company in Massachusetts hires workers then you must get one so that it can report payroll taxes plus remit them besides adhering to different employment-related laws in Massachusetts.
Filing business tax returns – Corporations together with partnerships among other specified types of organizations must have an E.I.N when filing their federal income tax return including employment taxes as well excise duty.
Establishment Of Business Bank Accounts: Most banking institutions require firms to produce an employer identification number while opening accounts for their enterprises since it aids in verifying legality and distinguishing separate identity from personal finances.
Application For Business Licenses And Permits: The local government of Massachusetts might demand the presentation of an employer identification number by applicants seeking various licenses and permits like sales tax permits, zoning permits, or even business licenses.
Applying For Business Credit: Lenders and Credit providers often need an Employer Identification Number (EIN) to create credit profiles for businesses to evaluate their creditworthiness. In Massachusetts, there are many banks that provide
Withholding Taxes on Certain Payments: Non-resident aliens receiving income subject to withholding tax should provide you with your E.I.N. while those operating Keogh plans must also be furnished with it since such pensions are deferred taxes.
Identifying Trusts, Estates, and Non-Profit Organizations: A trust, estate, real estate mortgage investment conduit (REMIC), or non-profit organization farmer’s cooperative plan administrator should get one when reporting taxes or for identification purposes.

Does an EIN serve as a Massachusetts Tax ID Number?

No, it doesn’t mean that EIN serves the same purpose as a Massachusetts Tax ID Number. An EIN is a federal tax identification number issued by the IRS while Massachusetts Tax ID Number is given out by the state tax office for state taxation purposes.

Who Needs a Domestic EIN in Massachusetts?

The Internal Revenue Service has laid down clear-cut guidelines on which businesses should possess a domestic EIN in Massachusetts. Generally, the following entities must have an EIN:

Corporations: Every corporation whether C corporation, S corporation, or personal service corporation needs to get this number.
Partnerships: Any partnership including general partnership limited partnership limited liability partnership requires having an employer identification number according to IRS rules.
Limited Liability Companies (LLCs): Most LLCs unless they are single-member LLCs that are disregarded entities for tax purposes will be required by law to obtain an E.I.N.
Trust and Estates: Except for some grantor-owned revocable trusts all other types of trusts as well as estates must acquire one.
Non-Profit Organizations: All nonprofit organizations – churches, charities among other tax-exempt bodies have no choice but to apply for this identifier.
Organizations of the Government: Some government agencies and organizations might need an EIN for specific reasons, such as employee payment or reporting tax-related information.
Companies with Employees: Any business entity that hires employees must have an EIN regardless of its legal structure to comply with employment tax laws.
Businesses Required to File Certain Tax Returns: Businesses filing employment tax returns; excise tax returns; or alcohol, tobacco, and firearms tax returns must obtain an EIN.

Even if your business is not required to have one, getting an EIN may still be beneficial. For example, sole proprietors and single-member LLCs without employees can opt to use an EIN instead of their personal Social Security Number for added privacy and to establish a separate business identity.

For single-member LLCs in Massachusetts that are treated as disregarded entities for tax purposes, you can use your SSN for federal taxes. Nevertheless, it is usually advisable to get an EIN so that personal and business accounts can be kept separate, credibility established and protection from identity theft enhanced.

When Do LLCs in Massachusetts Need an EIN?

In Massachusetts, the requirement for an LLC to obtain an EIN depends on several factors, including the number of members and the taxation structure of the LLC. Here are the general guidelines:

Single-Member LLCs

Single-member LLCs in Massachusetts are not required to obtain an EIN for federal tax purposes if they are treated as a “disregarded entity” for tax purposes. This means that the LLC is not considered a separate entity from its owner, and the owner reports the LLC’s income and expenses on their personal tax return using their Social Security Number (SSN). Also read: How to start a single-member LLC in Massachusetts

However, even if it’s not mandatory, it is generally recommended for single-member LLCs in Massachusetts to obtain an EIN for the following reasons:

entity

Opening a business bank account (most banks require an EIN for business accounts)
Establishing business credit and building a credit history separate from the owner’s personal credit
Protecting against identity theft by using the EIN instead of the owner’s SSN for business transactions
Maintaining a clear separation between personal and business finances
Complying with certain Massachusetts tax and licensing requirements

Multi-Member LLCs

Multi-member LLCs in Massachusetts are required to obtain an EIN regardless of their taxation structure. This is because multi-member LLCs are considered separate legal entities from their owners, and they must file their own tax returns using an EIN.

Additionally, LLCs in Massachusetts that choose to be taxed as corporations (either C-corporation or S-corporation) must obtain an EIN, even if they are single-member LLCs.

How to Apply for a Domestic EIN

Applying for a domestic EIN is relatively easy, and there are several convenient methods provided by the IRS. Here’s how it works:

Online Application

The easiest way of applying for EIN in Massachusetts is through the IRS’s online application system since it’s entirely paperless. This method is available only if the principal business/office or agency/legal residence is located within the United States (including its territories). To apply online:

Go to the EIN Online Application page on IRS website.
Fill out all necessary information on the form which includes the legal name of your business; the type of organization/entity; a reason why you’re applying among others; and personal details about the responsible party like SSN/ITIN etc.
You have to complete this application in one sitting because there’s no option for saving it midway through filling up later.
Once submitted & validated successfully – you’ll get instant approval along with an assigned EIN from the IRS.

Fax Application

Download Form SS-4, Application for Employer Identification Number; fill it out completely.
Find out the fax number relevant to your state/territory from the “Where to File Your Taxes” section in SS-4 instructions.
Fax filled-in Form SS-4 to the designated number provided above based on where you’re filing from.
Usually, if a fax number is given – the IRS will reply within four working days including EIN details.

Mail Application

Download & fill up Form SS-4, Application for Employer Identification Number correctly without any mistakes or missing information.
Check the correct mailing address according to your location/state/territory from the same section mentioned above “Where to File Your Taxes” on SS-4 instructions.
Post completed Form SS-4 to the address provided above depending upon where it should be sent for processing purposes etcetera – always double-check this detail before posting!
It usually takes around 28 calendar days (about four weeks) to process time via mail route thus advisable to apply well ahead of time required for having EIN in hand.

Telephone Application (International Applicants)

For applicants outside the US/territories with principal business/office or agency abroad: Contact the IRS via phone call at 267-941-1099 (not toll-free) between Monday-Friday Eastern Time 6 AM – 11 PM & provide all information asked for in Form SS-4 over the phone call itself. Also read: How to get foreign EIN in Massachusetts.

How long does it take to get an EIN after I apply?

If one applies online for an Employer Identification Number (EIN), they will receive it immediately upon their successful submission of the application. If fax, mail, or phone was used to apply then processing takes four to six weeks on average.

In order to complete the application, please provide the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the principal officer, general partner, grantor, owner, or trustor. This person or entity is known as the “responsible party” who controls, manages, or directs the applicant entity as well as exercises control over its assets and properties. The individual must be a natural person if not a government organization.

Third Party Designee

If you want another person such as an accountant or attorney to speak with the IRS about this application on your behalf, check the “Yes” box in the section indicated on Form SS-4. It is important to note that this authorization ends when EIN has been assigned thereby making it only valid for one specific application.

Obtaining an EIN for your LLC in Massachusetts:

Getting an EIN for your LLC is a relatively straightforward process. These are generic steps before you obtain your EIN. It is recommended to hire a professional if you’re doing it for the first time. Here are the steps you need to follow:

Form your LLC

Before you can apply for an EIN, you must first form your LLC in Massachusetts. This process typically involves filing the Certificate of Organization with the William Francis Galvin, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, MA 02108 and paying the $500. It’s important to note that you should not apply for an EIN until your LLC has been officially formed and approved by the state.

Also, before you file the Certificate of Organization, make sure to appoint a Resident Agent for your LLC. Hiring a registered agent is mandatory for an LLC as the RA would be the point of contact on behalf of your LLC for any legal and official issues.

Can I apply for an EIN before forming my LLC?

No, you can’t apply for an EIN before you form your LLC but it is better to have your LLC approved by Massachusetts Secretary of State first before applying for an EIN. If you apply for an EIN before forming the company this may result in some complications that may require obtaining a new one.

Gather the required information

To apply for an EIN in Massachusetts, you’ll need to have the following information ready:

Legal name of your LLC in Massachusetts (as listed on the Articles of Organization)
The mailing address and physical address of your LLC
Name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the responsible party (typically the LLC owner or manager)
Number of members in the LLC
Taxation structure (e.g., sole proprietorship, partnership, corporation)
Reason for applying for an EIN (e.g., starting a new business, hiring employees, changing ownership structure)

Choose your filing method

The next step is to choose the filing method. As mentioned above, there are several ways to apply for EIN. You can either choose online, by mail, fax, or through phone.

Submit your application

Once you have gathered the necessary information and chosen your filing method, follow the instructions provided by the IRS to submit your application. For the online application, the form will be submitted immediately. For the application by mail, it depends on the delivery of the mail to the office. It may take up to a few business days to receive the application sent by mail.

If you hire an LLC formation service, such as ZenBusiness, you might not need to worry about submitting your EIN application. They do that on your behalf. ZenBusiness is one of the top-rated business formation services that offer LLC formation at $0 in Massachusetts. However, there is a minimum charge to obtain EIN through ZenBusiness.

Receive your EIN

If you apply online, you’ll receive your EIN immediately upon successful submission of your application. If you apply by fax, mail, or phone, the IRS will mail you a CP 575 Notice (EIN Confirmation Letter) within four to six weeks.

Can I change my LLC’s taxation structure after getting an EIN?

Yes, one can do so but they might be required to get another EIN if there have been changes in ownership or organization that call for it.

Daily Limitation

IRS wants all taxpayers treated fairly therefore they limit each responsible party to one Employer Identification Number per day. Whether online or by fax/phone/mail request; these rules still apply.

Tax-Exempt Organizations

The IRS suggests that before applying for an Employer Identification Number (EIN), you should legally establish your business under state law as a tax-exempt entity. Once issued however there are filing requirements imposed by the Internal Revenue Service every year failure of which could lead to automatic revocation after three years of non-compliance.

Reporting Instructions

There may be some U.S formed corporations, limited liability companies, and other similar organization types required to submit beneficial ownership information – who owns/controls them ultimately – according to Financial Crimes Enforcement Network (FinCEN) reports due from January 1st, 2024 onwards still need studying along with necessary compliance measures by affected entities.

Mistakes One Should Not Make While Applying for EIN

Although the process involved in acquiring a Federal Tax ID Number also known as an Employer Identification Number (EIN) for your LLC in Massachusetts is generally simple, there are several common errors that one must avoid making; these include:

Applying for EIN before forming an LLC in Massachusetts:

One should never apply for a federal tax ID number before their limited liability company in Massachusetts has been legally established and approved by the relevant state authority like the Massachusetts Secretary of State located at William Francis Galvin, Secretary of the Commonwealth, One Ashburton Place, Room 1717, Boston, MA 02108. Applying for EIN before registering LLC could lead to complications which may necessitate getting a new one afterwards once the business entity has indeed come into existence

Providing incorrect or incomplete information on the application:

When applying for employer identification numbers, it’s always important to provide accurate details about your organization such as its legal name, physical address where mail can be sent or received from clients number of members involved among others; failure might result in delays during processing time or even outright denial based on misleading input.

Using the wrong filing method:

Although the online application procedure tends to be the fastest and most convenient way of obtaining Federal Tax ID numbers (EINs), some people may not qualify due to various reasons. For example, international applicants without taxpayer identification numbers (TINs) ought to use the telephone instead of online.

Applying before determining taxation structure:

It’s vital one knows how their limited liability will taxed whether sole proprietorship, partnership, or corporation thus helping them choose a suitable option while submitting a request since tax laws vary depending on individual circumstances.

Failure to keep records properly:

Once issued with EIN, make sure to store a copy in a safe place in case the original gets lost. So that you don’t have to generate another one unnecessarily. Avoiding these common mistakes will ensure a smooth and efficient process when applying for an EIN for your LLC in Massachusetts.

Points to Note

EIN Renewal: There is no need to renew your EIN; once given it stays with you until there’s any change of ownership or structure that necessitates obtaining another one.
Same EIN and for multiple businesses: Every separate business entity including Limited Liability Companies (LLCs) must have its own unique Employer Identification Numbers (EINS). You cannot share a single E.I.N. among various enterprises.
Misplaced or Lost EIN: Contact the Internal Revenue Service (IRS) and ask them for another copy of a confirmation letter bearing your Employee Identification Number (EIN) or verification document showing the same information. This will act as proof whenever required.
Change in LLC’s Address: Whenever there is any change of location within Limited Liability Company then the Internal Revenue Service needs to be informed about it immediately so that relevant records can be updated accordingly using Form 8822-B (Change of Address or Responsible Party).

FAQs

What is a domestic EIN and how is it different from other types of EINs in Massachusetts?

A domestic EIN is an Employer Identification Number specific to businesses operating in Massachusetts. It is different from other types of EINs because it is assigned to businesses based in Massachusetts.

How do I apply for a domestic EIN in Massachusetts?

To apply for a domestic EIN in Massachusetts, you can do so online through the IRS website or by mailing in Form SS-4.

If I already have a domestic EIN for my business in another state, do I need a separate one for operating in Massachusetts?

No, you can use the same EIN for your business in Massachusetts. Just make sure to report the business address for Massachusetts on your tax return.

How long does it take to receive a domestic EIN in Massachusetts after applying?

In most cases, you will receive your domestic EIN for Massachusetts immediately after completing the online application. If you mail in Form SS-4, it may take a few weeks.

Do I need a domestic EIN in Massachusetts if I am a sole proprietor with no employees?

Even if you are a sole proprietor with no employees, you may need a domestic EIN in Massachusetts if you plan on filing certain tax forms or opening a business bank account.

Can I use my social security number instead of a domestic EIN for my business in Massachusetts?

While you can use your social security number for certain tax purposes, it is recommended to obtain a domestic EIN for your business in Massachusetts to separate your personal and business finances.

What is the cost of applying for a domestic EIN in Massachusetts?

There is no cost associated with applying for a domestic EIN in Massachusetts. The application process is free through the IRS website or by mail.

Can I apply for a domestic EIN in Massachusetts if I am not a US citizen?

Yes, non-US citizens can apply for a domestic EIN in Massachusetts as long as they have a valid taxpayer identification number, such as an ITIN.

Do I need a domestic EIN in Massachusetts if I am a freelancer or independent contractor?

If you are a freelancer or independent contractor in Massachusetts and operating under your own name, you may not need a domestic EIN. However, if you have employees or operate under a business name, you will need one.

How often do I need to renew my domestic EIN in Massachusetts?

Your domestic EIN in Massachusetts does not expire, so there is no need to renew it. However, you should update your EIN information if there are any changes to your business, such as a new address or ownership.

Can I cancel my domestic EIN in Massachusetts if I no longer have a business?

Yes, you can cancel your domestic EIN in Massachusetts by writing to the IRS and providing the reason for cancellation. Make sure to file your final tax return before canceling your EIN.

What type of businesses are required to have a domestic EIN in Massachusetts?

All businesses operating in Massachusetts that are required to file federal tax returns, have employees, or operate as a partnership or corporation must have a domestic EIN.

Can I change the business name associated with my domestic EIN in Massachusetts?

If you need to change the business name associated with your domestic EIN in Massachusetts, you will need to notify the IRS of the change by filing a form requesting a name change.

Do I need a domestic EIN in Massachusetts if I am a nonprofit organization?

Yes, nonprofit organizations operating in Massachusetts are still required to have a domestic EIN for tax purposes, even if they are tax-exempt.

Can I use my domestic EIN in Massachusetts for multiple businesses?

Each business entity will need its own domestic EIN in Massachusetts. If you have separate businesses, each one should have its own unique EIN.

Are there specific tax forms that require a domestic EIN in Massachusetts?

Yes, certain tax forms such as the 941 Employer’s Quarterly Federal Tax Return and the 1120 Corporate Income Tax Return will require a domestic EIN in Massachusetts.

Can I apply for a domestic EIN in Massachusetts if I am a partnership or LLC?

Yes, partnerships and LLCs operating in Massachusetts are required to have a domestic EIN for tax purposes. You can apply for one through the IRS website or by mail.

What information do I need to provide when applying for a domestic EIN in Massachusetts?

When applying for a domestic EIN in Massachusetts, you will need to provide information such as the business name, address, type of business entity, and responsible party’s name and social security number.

Can I use a third-party service to apply for a domestic EIN in Massachusetts on my behalf?

Yes, you can use a third-party service to help you apply for a domestic EIN in Massachusetts. Just make sure you authorize them to act on your behalf and provide accurate information on the application.

Can I use my domestic EIN for business purposes in Massachusetts?

Yes, your domestic EIN can be used for business purposes in Massachusetts.

Do I need a domestic EIN if I only have a business in Massachusetts?

Yes, a domestic EIN is required for businesses operating in Massachusetts.

How long does it take to receive my domestic EIN in Massachusetts?

You should receive your domestic EIN for a business in Massachusetts immediately after completing the online application.

Can I use a domestic EIN for multiple businesses in Massachusetts?

Yes, a domestic EIN can be used for multiple businesses in Massachusetts.

Are there any restrictions on who can apply for a domestic EIN in Massachusetts?

No, there are no restrictions on who can apply for a domestic EIN in Massachusetts.

Will my domestic EIN be valid if I move my business out of Massachusetts?

Yes, your domestic EIN will still be valid if you move your business out of Massachusetts.

Can I apply for a domestic EIN in Massachusetts if my business is located outside of Massachusetts but I do business in the state?

Yes, you can apply for a domestic EIN in Massachusetts even if your business is located outside of the state.

Can I apply for a domestic EIN in Massachusetts if I operate a sole proprietorship?

Yes, sole proprietors can apply for a domestic EIN in Massachusetts.

Can I apply for a domestic EIN in Massachusetts if my business is a partnership?

Yes, partnerships can apply for a domestic EIN in Massachusetts.

Can I apply for a domestic EIN in Massachusetts if my business is a corporation?

Yes, corporations can apply for a domestic EIN in Massachusetts.

Can I apply for a domestic EIN in Massachusetts for a non-profit organization?

Yes, non-profit organizations can apply for a domestic EIN in Massachusetts.

Do I need a separate domestic EIN for each branch of my business in Massachusetts?

No, you only need one domestic EIN for your entire business, even if it has multiple branches in Massachusetts.

Can I apply for a domestic EIN in Massachusetts if my business is a trust?

Yes, trusts can apply for a domestic EIN in Massachusetts.

Can I change the legal name of my business associated with my domestic EIN in Massachusetts?

Yes, you can change the legal name of your business as long as you update your EIN with the IRS.

Can I hire someone to apply for a domestic EIN on my behalf in Massachusetts?

Yes, you can hire someone to apply for a domestic EIN on behalf of your business in Massachusetts as long as they have a power of attorney.

Conclusion

Getting an Employer Identification Number (EIN) from Massachusetts is a necessary step for any LLC. The process is not complicated, but it is important to know what is required and follow all necessary steps in order to comply fully with local and federal laws.

This article depicts how to get your LLC’s EIN in Massachusetts by avoiding mistakes that many people make. There are several benefits of having an EIN for your business such as separating personal and company finances, establishing credibility, and protecting against identity thefts among others also makes hiring employees easy. Having a professional LLC formation service, like ZenBusiness, that offers EIN services in their formation packages.

Remember always consult with experts like accountants or lawyers if there are any questions specific about getting an EIN for an LLC registered in Massachusetts. They can give advice based on individual circumstances.