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Step by Step: Employer Tax Obligations

Listing of the responsibilities of a Massachusetts employer.

An employer is any person, corporation or organization for whom an individual performs a service as an employee. Your responsibilities as a Massachusetts employer are to:

  • Register your business with the Massachusetts Department of Revenue to withhold income taxes from your employees' wages. Visit Business Taxes to learn more about other taxes which you may need to register for.
     
  • Obtain from each employee a completed federal Form W-4, Employee Withholding Allowance Certificate — and send it to the Internal Revenue Service.
     
  • If necessary obtain from each employee a completed Form M-4, Massachusetts Employee's Withholding Exemption Certificate — and send it to the Massachusetts Department of Revenue.
    • An M-4 is required when the employee wishes to claim a different number of withholding exemptions for Massachusetts withholding purposes than he or she is claiming federally, because of differences in the number of exemptions allowed.
       
  • Withhold tax and/or child support payments from the paychecks of your employees or independent contractors, and remit those funds to the Department of Revenue, if directed to do so by a court or the Department of Revenue.
     
  • File quarterly reports of wages paid to each employee who resides or is employed in Massachusetts with the Massachusetts Department of Unemployment (DUA).
     
  • Provide each employee a Form W-2, Wage and Tax Statement by January 31, or within 30 days if employment ends before the end of the year. The W-2 should show:
    • Total amount of wages paid
    • Total Social Security and Medicare taxes withheld
    • Amount of federal and Massachusetts income tax withheld for the prior year.
       
    • If required, file copies of all W-2s with the Massachusetts Department of Revenue. You must also file your W-2 information with the Social Security Administration.
       
  • Register with the Massachusetts Department of Unemployment Assistance and fulfill the obligations for state employment security taxes
     
  • Purchase workers' compensation insurance before employees start working for you.
     
  • Contact the Internal Revenue Service obligations for withholding federal income, Social Security, and Medicare taxes.

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