Massachusetts New Employer Information
Federal and State Tax Accounts
Federal Tax Accounts:
- Apply for an Employer Identification Number (EIN or FEIN) if you don’t already have one. The simplest (and preferred) way is to apply with the IRS online. There is no cost to apply.
- To read more about applying for an EIN, read our help article, “Your Step-by-step Guide on How to Apply for EIN.”
- Although it is not required, we recommend that register for this federal tax paying system. You can easily register online. This account will be helpful for you to make tax payments online or view whatever tax filings have been made on your behalf by Patriot if you are a Full Service Payroll customer.
- To find out more about the EFTPS, read our article, “What Is EFTPS?”
State of Massachusetts Tax Accounts:
- New employers will need to register their business online with the Massachusetts Department of Revenue. Registration will be be necessary for a state income tax (SIT) withholding account.
- Massachusetts new employers will also need to register online with the UI Employer Registration Portal for a state unemployment insurance (SUI) tax account once you have paid your employees. NOTE: You will not be able to get an EIN with the MA Labor and Workforce Development until after you have paid your first employee.
- For more information, visit the Massachusetts Labor and Workforce Development.
- The Massachusetts new employer SUTA rate for non-construction employers is 2.42% for 2020, (new construction employers use 7.37% for 2020). Rates for 2021 have not been released yet.
- For your information: In addition to the unemployment insurance contribution, all employers are subject to a Workforce Training Fund of 0.056% for 2020. However, you DO NOT need to include this rate in your SUTA rate for our software. It is automatically calculated.
- You will be assigned an unemployment tax rate (SUTA) every year based on your industry and experience rating.
- Massachusetts new employers are exempt from the EMAC (Employer Medical Assistance Contribution) for the first 3 years. For more information, visit the Massachusetts Office of Labor and Workforce Development.
Setting Up Your New Employee:
- Have your new employee fill out Form W-4, Employee’s Withholding Certificate, for federal income taxes.
- For more information, read our help article, “Updates to the Income Tax Withholding Tables and What You Need to Know”
- Have your new employee fill out Form M-4, Massachusetts Employee’s Withholding Exemption Certificate for Massachusetts state income taxes (SIT).
- Massachusetts employers must meet the 2021 minimum wage rate of $13.50 per hour.
- You need to display the Massachusetts minimum wage poster where your employees can read it.
Once you have all the necessary information, you will be able to set up your payroll for your business.
You will want to keep all payroll records for at least three years. For more information, read our help article, “What Employers Should Know About Employee Payroll Records”
Let us know if you have any questions. We are here to help!
This is not an all-inclusive list and employers should contact their federal, state, and local government for a full list of compliances.