How to Become a Tax Preparer: PTIN, EFIN, AFSP and State Rules Explained

Becoming a paid tax preparer is less about one license and more about stacking the right IRS and state requirements in the right order. Get the order wrong, for example applying for your e-file number in January, and you can lose your first season. This guide walks through each step as it stands for 2026, with what each costs and how long it takes.

The credential layers at a glance

Step 1: Get your PTIN

A Preparer Tax Identification Number is mandatory for anyone who prepares, or helps prepare, federal tax returns or refund claims for compensation. It goes on every return you sign.

• Apply online through the IRS Tax Professional PTIN System (paper Form W-12 is the slower alternative).
• Have ready your Social Security number, personal and business addresses, details from your prior-year individual return, and explanations of any felony convictions or problems with your own tax obligations.
• New online applicants with an SSN verify their identity through ID.me.
• Pay the non-refundable fee: $18.75 for 2026 and $18.75 for 2027.
• Renew every year. PTINs expire on December 31, and the renewal period opens in mid-October.

Tip: Your own tax compliance matters. Make sure your personal returns are filed and any balance is paid or on an installment agreement before you apply.

Step 2: Get trained

A PTIN proves nothing about competence. Before your first paying client, take a comprehensive basic income tax course (commonly 40-80 hours), prepare practice returns, and ideally work a season under an experienced preparer or in the IRS Volunteer Income Tax Assistance (VITA) program.

Step 3: Earn the AFSP Record of Completion

The Annual Filing Season Program is voluntary but worth it for preparers who are not CPAs, attorneys or enrolled agents.

For non-exempt preparers, the requirements are:

• ☐ 18 hours of continuing education from IRS-approved providers, made up of:
• a 6-hour Annual Federal Tax Refresher (AFTR) course with a comprehension test;
• 10 hours of other federal tax law;
• 2 hours of ethics.
• ☐ An active PTIN for the year.
• ☐ Consent to the practice obligations in Circular 230, Subpart B and section 10.51.

Preparers exempt from the AFTR course, such as those who passed certain recognized state tests, need 15 hours instead: 10 of federal tax law, 3 of updates and 2 of ethics.

Deadline: complete the CE by December 31 for the following filing season. For filing season 2027, that means by December 31, 2026.

What you get: a listing in the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications, and limited representation rights. You can represent clients whose returns you prepared and signed, but only before revenue agents, customer service staff and the Taxpayer Advocate Service during examinations, not in appeals or collections. Preparers with only a PTIN have no representation rights.

Step 4: Apply for your EFIN

If you expect to file 11 or more individual income tax returns in a year, you generally must e-file them, which requires your firm to become an Authorized IRS e-file Provider with an Electronic Filing Identification Number.

1. Create an IRS e-Services account for each Principal and Responsible Official.
2. Complete the e-file application inside e-Services, entering firm details and choosing Electronic Return Originator (ERO) as your provider option.
3. Provide professional credentials, or get fingerprinted through the IRS's authorised vendor. Principals who are not attorneys, CPAs, enrolled agents or certain other professionals must be fingerprinted; you schedule this from your application summary page after submitting.
4. Pass a suitability check, which may include credit, tax compliance, criminal background and prior e-file compliance checks.
5. Receive your acceptance letter with your six-digit EFIN.

Timing: up to 45 days. Apply in the summer or early autumn.

Warning: Never use or rent another firm's EFIN. Each EFIN belongs to a specific firm, and misuse can get you expelled from e-file.

Step 5: Check your state's rules

Most states rely on the federal PTIN, but some add their own requirements:

CPAs, attorneys and enrolled agents are exempt from several of these programs. Also check city or county business license rules.

Step 6 (optional but powerful): Become an enrolled agent

An enrolled agent has unlimited rights to represent any taxpayer on any matter before the IRS. To qualify, pass all three parts of the Special Enrollment Examination within three years, apply for enrollment and pass a suitability check. Since March 1, 2026 the exam has been run by PSI Services, at $317 per part as of 2026. Enrolled agents complete 72 hours of CE every three years, with at least 16 each year.

A worked example: the timeline and budget

Daniel decides in May to open a tax practice in Texas (which has no extra state preparer registration) for the next filing season.

Daniel's total before his first client is roughly $3,640, plus per-return software fees as he files. Had he waited until January to submit his e-file application, he could have spent much of February unable to e-file.

Your next step

If filing season is less than four months away, apply for your PTIN and submit your e-file application this week, then book your AFSP CE. Everything else can be built around those deadlines.

The full guide, Starting a Tax Preparation Business, covers the rest: engagement letters and section 7216 consents, professional software and bank products, due diligence interviews, your written information security plan, fee schedules, a tax-season workflow, marketing and a 30/60/90-day launch plan, for $0.99.