If your LLC has more than one member or if you are going to hire employees, you’ll need an EIN. But these aren’t the only factors. The IRS offers a test to determine if you need an EIN:
Do you have employees?
Do you operate your business as a corporation or a partnership?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco, and Firearms?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
Are you involved with any of the following types of organizations?
Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Real estate mortgage investment conduits
If you answer yes to these questions, your business needs an EIN.
Benefits of Having an EIN
There are several reasons to get an EIN, even if you’re not required to have one.
It’s often required to open a business bank account. However, it creates separation between your business and personal finances because bankers, creditors, and the IRS will identify your business by its EIN rather than your personal Social Security number.
Also, it helps establish business credit, which will boost your access to financing. And, if you do end up hiring employees in the future, you’ll already have your EIN and be ready to go.
What Do I Need to Get an EIN in Massachusetts?
According to the IRS:
All EIN applications (mail, fax, electronic) must disclose the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner, or trustor. This individual or entity, which the IRS will call the ‘responsible party,’ controls, manages or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.
When you fill out the application, you’ll need the following:
Name, title, and Social Security number of managing member or owner
State in which your business is registered
Reason for applying
Main business activity
Closing month of your accounting year
Contact phone number and email
How to Apply for an EIN in Massachusetts
The application is Form SS-4, and you can submit it via the IRS website. Alternatively, you can print the form and fax or mail it. If you apply online, your EIN will be issued immediately.
There is no cost to obtain an EIN, which never expires.
Register for Massachusetts Taxes
You also may need to register for business taxes in Massachusetts.
If you have employees, you’ll need to register to withhold state income tax with the Department of Revenue. In addition, you can register for sales tax on the same site if you sell taxable goods or services.
Are there any costs associated with obtaining an EIN for my LLC in Massachusetts?
No, applying directly through the IRS for an EIN is free of charge.
After applying, how long should I expect to wait for my EIN in Massachusetts?
If you opt for the online application, you’ll generally receive your EIN immediately upon completion. Fax applications might take up to four business days, and mailed applications can require 4-5 weeks.
Instead of an EIN, can I use my personal SSN for my LLC's transactions in Massachusetts?
While certain sole proprietors may use their SSN, it’s highly recommended for LLCs to obtain an EIN. This keeps personal and business finances distinct and ensures you meet various business-related requirements.
Do EINs for Massachusetts LLCs ever need renewal or do they expire?
No, once assigned to your LLC, the EIN remains associated with it indefinitely. However, if there are significant structural changes to your business, a new EIN might be necessary.
Can a non-U.S. resident apply for an EIN for their Massachusetts-based LLC?
Absolutely. Foreign individuals can get an EIN for their LLC in Massachusetts. Even without an SSN or ITIN, they can still apply, usually by fax or mail.
Are there specific EIN procedures or requirements unique to Massachusetts that I should be aware of?
While the EIN application process is standardized at the federal level by the IRS, it’s important to be aware of any Massachusetts-specific regulations or requirements once you’ve obtained your EIN.