To become a tax preparer in the US, you must get a Preparer Tax Identification Number (PTIN) from the IRS before you prepare federal returns for pay. The fee is $18.75 as of October 2026 and you renew it every year. There's no federal licence beyond that, but the voluntary Annual Filing Season Program and the enrolled agent credential let you do more.
Tax preparation is one of the easiest professional services to start, and that's exactly why the IRS created extra tiers. I read the IRS pages on PTINs, the Annual Filing Season Program and enrolled agents on 26 October 2026. Here's how the levels work.
The three levels of federal tax preparer
| Level | What you need | What you can do |
|---|---|---|
| PTIN holder | A valid PTIN, renewed every year | Prepare federal returns for pay; no representation for returns prepared after December 31, 2015 |
| Annual Filing Season Program | 18 hours of continuing education, including a six-hour federal tax law refresher course with test, plus a renewed PTIN and consent to Circular 230 obligations | Limited representation for returns you prepared and signed, and a listing in the IRS public directory |
| Enrolled agent | Pass a three-part IRS exam or qualify through experience as a former IRS employee; 72 hours of continuing education every three years | Unlimited practice rights before the IRS |
How to become a tax preparer, step by step
- Apply for a PTIN. The IRS says most first-time applicants can get one online in about 15 minutes. The fee is $18.75, non-refundable and non-transferable, as of October 2026. Paper applications on Form W-12 take 6 weeks.
- Learn the returns you'll prepare. The IRS doesn't set an exam for a basic PTIN, so your training is up to you. Continuing education is encouraged for every preparer.
- Join the Annual Filing Season Program. It's voluntary, but it gets you a Record of Completion, a place in the IRS public directory, and limited representation rights.
- Renew every year. PTINs must be renewed annually, again for $18.75 as of October 2026.
- Consider the enrolled agent route. It's the highest credential the IRS awards and lets you represent any taxpayer on any tax matter.
The representation rule most new preparers miss
Here's the detail that matters for your business. Since returns prepared and signed after December 31, 2015, PTIN holders without an Annual Filing Season Program Record of Completion or another professional credential can only prepare returns. They can't represent clients before the IRS at all.
If you complete the Annual Filing Season Program, you can represent clients whose returns you prepared and signed, but only before revenue agents, customer service representatives and similar IRS employees, including the Taxpayer Advocate Service. Attorneys, CPAs and enrolled agents are the only tax professionals with unlimited representation rights, covering audits, payment and collection issues, and appeals.
In practice, that means a client who gets an IRS letter may need someone else if you only hold a PTIN. Being able to say "I can deal with that for you" is a strong selling point.
Who needs a PTIN and who doesn't
The IRS PTIN FAQ says all enrolled agents need one, as do all preparers who are paid to prepare, or help prepare, all or substantially all of a federal tax return or claim for refund. Attorneys and CPAs only need a PTIN if they prepare all or substantially all of a federal return for pay. And the IRS is clear: if you don't have a PTIN, you can't prepare federal tax returns for compensation.
The enrolled agent route in more detail
An enrolled agent earns the right to represent taxpayers before the IRS either by passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agents must follow ethical standards and complete 72 hours of continuing education every three years. Like attorneys and CPAs, they're unrestricted in which taxpayers they represent, what matters they handle and which IRS offices they appear before.
If you want a broader accounting career, compare this with my guides on how to become a CPA and how to become a bookkeeper, which many preparers combine with tax work to keep clients all year.
Running it as a side business
Plenty of preparers start part-time during filing season. If you go that way, keep a simple checklist: PTIN renewed, continuing education logged, Record of Completion if you want the directory listing, and clear engagement letters so clients know what you can and can't do for them. That's what keeps you on the right side of the IRS and builds trust.
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Which level should you aim for?
If you only want to help a few friends and neighbours each spring for a fee, a PTIN is the legal minimum. If you want clients to find you, the Annual Filing Season Program puts you in the IRS public directory alongside attorneys, CPAs and enrolled agents, which is a real trust signal. And if you want to handle audits, collection issues and appeals, you'll need enrolled agent status, because that's where unlimited representation starts. Most people who stick with tax work end up moving up a level within a few seasons.
My verdict
Becoming a paid tax preparer is quick: a PTIN takes about 15 minutes and $18.75. But a PTIN alone is the bottom rung, with no right to represent clients. If you're serious, join the Annual Filing Season Program in your first year and aim for enrolled agent status, because that's what turns a seasonal side gig into a year-round practice.
Frequently asked questions
Do you need a license to be a tax preparer?
There's no federal licence, but the IRS requires a Preparer Tax Identification Number (PTIN) for anyone who prepares federal returns for compensation.
How much does a PTIN cost?
As of October 2026, the IRS fee is $18.75 for a new PTIN or a renewal, and it's non-refundable.
Is the Annual Filing Season Program required?
No, it's voluntary. It requires 18 hours of continuing education, including a six-hour federal tax law refresher course with test.
What is the highest IRS credential for tax preparers?
Enrolled agent status is the highest credential the IRS awards, and it comes with unlimited practice rights.
Can a tax preparer represent clients before the IRS?
Only with a credential or the Annual Filing Season Program. PTIN holders without either can only prepare returns, not represent clients, for returns prepared after December 31, 2015.
