To become a tax preparer in Pennsylvania, you do not need a state license, but you do need to stack several federal and local registrations in the right order before you accept your first paying client. At a minimum: a federal Preparer Tax Identification Number (PTIN) from the IRS, an Electronic Filing Identification Number (EFIN) if you plan to e-file, a Pennsylvania business registration, a written data security plan, and in Philadelphia, a Commercial Activity License with a specific client fee disclosure. None of these steps is difficult on its own. The problem is that they take time, and anyone who starts in January is already behind.
Step 1: Get Your PTIN
The PTIN is the one credential every paid preparer must hold. Federal regulations require anyone who prepares or helps prepare a federal tax return for compensation to have a current one.1eCFR. 26 CFR 1.6109-2 – Tax Return Preparers Furnishing Identifying Numbers for Returns or Claims for Refund and Related Requirements There is no exam. There is no education requirement. If you get paid to prepare a return, you need the number, and preparing even one return without it exposes you to IRS penalties.
Apply through the IRS Tax Professional PTIN System at irs.gov. You will need your Social Security Number, your mailing address, and information from the individual tax return you filed the previous year, which the IRS uses to verify your identity. If you already hold a credential as a CPA or Enrolled Agent, enter that information during the application.
The 2026 fee is $18.75.2Internal Revenue Service. IRS Reminds Tax Pros to Renew PTINs for the 2026 Tax Season Once you pay, the system issues your number immediately and you can begin signing returns. Every PTIN expires December 31, and the renewal window opens in mid-October.3Internal Revenue Service. Frequently Asked Questions: PTIN Application/Renewal Assistance Put the renewal on your October calendar. A lapsed PTIN makes every return you sign afterward technically deficient.
Step 2: Get an EFIN If You Plan to E-File
Most clients expect their returns filed electronically, and to do that on their behalf you need an Electronic Filing Identification Number. Apply through the IRS e-services portal at irs.gov. Approval can take up to 45 days from submission.4Internal Revenue Service. Become an Authorized E-File Provider This is the step that catches new preparers off guard. If you apply in January and expect to e-file the following week, you have a problem.
After submission, the IRS runs a suitability check that can include a credit check, a tax compliance check, a criminal background check, and a review for prior e-file violations.4Internal Revenue Service. Become an Authorized E-File Provider Licensed attorneys, CPAs, and Enrolled Agents who enter their credential information on the application can skip fingerprinting. Everyone else must be fingerprinted through the IRS-authorized vendor, and the scheduling link appears on your application summary page only after the application is successfully submitted.5Internal Revenue Service. New E-File Application Fingerprinting Process Implemented
Final authorization arrives by letter at your registered business address, so make sure the address on your application is where you actually get mail.
Step 3: Register Your Pennsylvania Business
Pennsylvania requires every new business to complete the Pennsylvania Enterprise Registration using Form PA-100. The form links your business to the Department of Revenue for state tax purposes and to the Department of Labor and Industry for employment reporting. You will need your federal Employer Identification Number and a verified physical business address.
A sole proprietor can use a Social Security Number and home address, but forming an LLC adds liability protection worth considering. Filing a certificate of organization for a Pennsylvania LLC currently costs $125 with the Department of State.
Local rules matter too. Municipalities may require occupancy permits or zoning approvals if you plan to see clients in a home office or lease commercial space. Rules vary by township and borough, so check with your local zoning office before you sign a lease or hang a sign.
Step 4: Philadelphia-Specific Requirements
If you operate in Philadelphia or serve clients there, the city layers two more requirements on top of everything else.
First, every business conducting activity in Philadelphia must hold a Commercial Activity License, whether or not the business is physically located in the city.6City of Philadelphia. Get a Commercial Activity License You will need your federal EIN or SSN and your Business Income and Receipts Tax ID to apply, and you must be current on all City of Philadelphia taxes before the license issues.
Second, Philadelphia has a tax preparer disclosure law. Before you perform any work for a client, you must give them a written statement listing the cost of your services and any additional fees that could apply, and the client must acknowledge receipt by signing a copy or providing a digital certification.7American Legal Publishing. The Philadelphia Code 9-640 – Tax Preparation Services Build the disclosure into your client intake so it happens automatically before any work begins. Skipping it violates the city code.
Step 5: Write Your Data Security Plan
This is the step most new preparers overlook, and it is not optional. The FTC Safeguards Rule treats tax preparers as financial institutions, which means you must develop, implement, and maintain a written information security program that protects client data.8Federal Trade Commission. FTC Safeguards Rule: What Your Business Needs to Know The program must include administrative, technical, and physical safeguards appropriate to the size of your business and the sensitivity of the data you handle.
In practice, that means documenting how you store client files, who has access to them, how you secure your computers and networks, and what you do when something goes wrong. A solo preparer working from a home office does not need the same infrastructure as a large firm, but still needs a written plan on file. The IRS refers to this document as a Written Information Security Plan, or WISP. Draft yours before you collect a single client’s Social Security Number.
Should You Join the Annual Filing Season Program?
The Annual Filing Season Program is voluntary, but it is the best way for a non-credentialed preparer to stand out. Completing it earns a Record of Completion and limited rights to represent clients before the IRS during examinations of returns you prepared and signed.9Internal Revenue Service. Annual Filing Season Program Without it, you have no representation rights at all.
The program requires 18 hours of continuing education from IRS-approved providers each year:10Internal Revenue Service. General Requirements for the Annual Filing Season Program Record of Completion
- Six hours of the Annual Federal Tax Refresher course, covering current-year filing issues and law updates, followed by a comprehension test you must pass
- Ten hours of federal tax law topics of your choice
- Two hours of ethics
The refresher test, administered by the continuing-education provider at the end of the course, is the real gatekeeper; you cannot earn the Record of Completion without passing it. You also need a current PTIN and must consent to follow the practice obligations in Circular 230.9Internal Revenue Service. Annual Filing Season Program Finish the hours and pass the test before December 31 if you want the credential for the following filing season.
Sequencing the Steps
Work backward from the January you want to open. Apply for your PTIN first; the number issues the moment you pay. Submit your EFIN application at least 45 days before your first planned e-file. File your PA-100 and, if you will touch Philadelphia clients, your Commercial Activity License well before you open. Draft your written information security plan before any client data arrives. If the AFSP matters to you, finish the 18 hours and pass the refresher test before year end.
Done in this order, a new preparer is fully operational on day one of filing season. Done in reverse, the busiest weeks of the year disappear into paperwork instead of client work.