How to Become a Tax Preparer: Licensing and AFSP Requirements
If you are researching how to become a tax preparer in Washington State, the process is more straightforward than many people expect. Washington does not generally require a separate state license for someone who prepares ordinary tax returns. However, paid preparers must follow federal IRS requirements and comply with Washington business registration rules.
You may also be considering the IRS Annual Filing Season Program, or AFSP. This voluntary program provides additional education and limited representation rights for qualifying tax preparers.
This guide explains the main steps, the difference between a PTIN and AFSP participation, and why clients may prefer a preparer who maintains current training.
Important: Tax and licensing rules can change. Review current requirements with the IRS, the Washington Department of Revenue, and other applicable state agencies before offering services.
Washington Does Not Generally Require a Tax Preparer License
Washington does not operate a separate state licensing program specifically for general tax return preparers. You do not usually need to become a CPA simply to prepare federal or state tax returns for clients.
A CPA license is a separate professional credential. It may be required if you want to use the CPA title or perform services regulated under Washington accountancy law, such as certain attest services. The Washington State Board of Accountancy provides information about CPA licensing and regulated accounting services.
For most paid tax preparers, the essential federal requirement is an active Preparer Tax Identification Number, commonly called a PTIN.
Step 1: Obtain an IRS PTIN
The IRS requires anyone who prepares or assists in preparing federal tax returns for compensation to have a valid PTIN. This requirement applies to non-credentialed preparers, enrolled agents, CPAs, and attorneys who prepare returns for pay.
A PTIN allows you to prepare federal tax returns for compensation. It is not the same as a CPA license, enrolled agent credential, or AFSP Record of Completion.
You can apply for or renew a PTIN through the IRS PTIN system. The IRS states that most applicants can complete the online process in approximately 15 minutes. The current application or renewal fee is listed on the IRS PTIN requirements page.
Remember these basic rules:
- Obtain your PTIN before preparing paid federal returns.
- Renew it each year.
- Use your own PTIN when preparing returns.
- Keep your account information current.
- Make sure your PTIN is valid for the tax year and filing season involved.
Having a PTIN is the minimum federal requirement for paid preparation. It does not, by itself, provide the right to represent a client before the IRS.
Step 2: Register Your Washington Business
If you operate independently or start a tax preparation firm, you may need a Washington business license and tax registration.
The Washington Department of Revenue says registration is generally required when a business meets certain conditions, including:
- Gross income of $12,000 or more per year.
- Use of a business name other than your full legal name.
- Hiring employees.
- Providing a service subject to sales tax.
- Having other tax or fee obligations administered by the Department of Revenue.
- Meeting applicable nexus reporting thresholds.
You can review the state’s business license requirements and use the Washington Business Licensing Wizard to identify the registrations and endorsements that may apply to your business.
You may also need local city or county endorsements. Requirements can differ depending on where your business is located and whether you work from home, operate an office, or serve clients in multiple locations.
If you plan to form a Washington corporation, partnership, or limited liability company, review the Secretary of State filing requirements before applying for your business license.
Step 3: Learn Tax Preparation Fundamentals
Washington does not generally require a specific tax preparer education program. However, training is strongly recommended before accepting clients.
A tax preparer should understand the basic rules for:
- Form 1040 individual tax returns.
- Filing status and dependents.
- Wages, self-employment income, and investment income.
- Common deductions and credits.
- Estimated tax payments.
- Retirement contributions.
- Health insurance and education-related tax issues.
- Washington business taxes, including B&O tax where applicable.
- Recordkeeping and client document security.
You should also understand the limits of your services. If a client needs an audit, appeal, collection assistance, complex representation, or regulated accounting work, the client may need an enrolled agent, CPA, attorney, or other qualified professional.
The IRS explains the differences between PTIN holders, AFSP participants, enrolled agents, CPAs, and attorneys in its guide to tax return preparer credentials and qualifications.
Step 4: Decide Whether You Need an EFIN
If you plan to electronically file client returns through your own firm, you may need an IRS Electronic Filing Identification Number, or EFIN.
An EFIN is associated with an authorized e-file provider and is separate from your personal PTIN. A firm may also work under another provider’s e-file arrangement, depending on its structure and software provider.
Before e-filing, review the IRS requirements for becoming an authorized e-file provider. You should also establish procedures for:
- Verifying client identity.
- Obtaining required signatures and authorizations.
- Protecting Social Security numbers and financial records.
- Retaining copies of returns and supporting documents.
- Handling rejected returns.
- Communicating filing status clearly.
E-filing access, software, and business arrangements should be in place before you begin accepting returns.
What Is an AFSP Tax Preparer?
So, what is an AFSP tax preparer?
An AFSP tax preparer is generally a non-credentialed preparer who completes the IRS requirements for the Annual Filing Season Program and receives an official AFSP Record of Completion.
AFSP participation is voluntary. It is not a Washington license and does not make the preparer a CPA or enrolled agent.
For a non-exempt preparer, the IRS generally requires:
- 18 hours of IRS-approved continuing education.
- A 6-hour Annual Federal Tax Refresher course, including a test.
- 10 hours of federal tax law education.
- 2 hours of ethics education.
- An active PTIN.
- Consent to follow applicable obligations under Circular 230.
Some preparers may qualify for an exemption from the AFTR course based on recognized testing, credentials, or approved experience. Exempt preparers generally complete 15 hours of continuing education:
- 10 hours of federal tax law.
- 3 hours of federal tax law updates.
- 2 hours of ethics.
The IRS provides the current general AFSP requirements and information about reduced requirements for exempt individuals.
AFSP Benefits and Representation Rights
An AFSP Record of Completion shows that the preparer completed additional annual education. AFSP participants may also appear in the IRS public directory of federal tax return preparers.
Another important benefit is limited representation rights.
An AFSP participant may generally represent clients before certain IRS employees regarding returns the preparer completed and signed. These rights are limited. They do not cover every IRS matter, and they do not provide unlimited representation rights for audits, appeals, or collection matters.
Enrolled agents, CPAs, and attorneys have broader representation rights. A PTIN holder without an AFSP Record of Completion or another recognized credential may prepare returns but generally cannot represent clients before the IRS.
AFSP participation should therefore be viewed as an added education and qualification step, not as a substitute for a CPA or enrolled agent credential.
How AFSP Applies to the 2025 Tax Year
Tax professionals should pay attention to the difference between a tax year and a filing season.
The 2025 tax year generally refers to income earned during 2025. Those returns are prepared and filed during the following filing season. AFSP requirements are completed annually and apply to a specific filing season.
If you are preparing 2025 tax year returns, confirm that your PTIN and any AFSP Record of Completion apply to the current filing period. Requirements and deadlines may change each year, so use the IRS guidance for the applicable season.
Statewide Tax Services is accepting individual and business clients for the 2025 tax year. Clients can use the company’s tax preparation process to review the information needed and begin the preparation process.
For planning purposes, e-filing is expected to pause beginning December 26 and resume in mid-to-late January. You may still contact Statewide Tax Services to discuss your situation, organize documents, and plan your filing timeline.
Why AFSP Training Matters to Clients
Clients should look beyond price when choosing a tax preparer. A preparer’s training, current PTIN, experience, communication process, and willingness to explain the return are all important.
An AFSP Record of Completion may indicate that the preparer has completed additional annual education in federal tax law, updates, and ethics. It also gives clients a way to verify certain qualifications through the IRS directory.
At Statewide Tax Services, clients receive virtual tax preparation and accounting support designed around their individual or business situation. Services include:
- Individual tax preparation.
- Business tax preparation.
- Electronic filing when available.
- Accounting and bookkeeping.
- Tax and accounting consultations.
- Support based on the client’s specific financial circumstances.
You can review the company’s individual tax preparation services, business tax preparation services, and accounting and bookkeeping services.
Practical Checklist for New Washington Tax Preparers
Use this checklist as a starting point:
- Complete foundational tax preparation training.
- Apply for an IRS PTIN.
- Renew the PTIN each year.
- Choose a business structure.
- Review Washington business license and tax registration requirements.
- Check city and county licensing requirements.
- Decide whether you will need an EFIN for e-filing.
- Set up secure document and client communication procedures.
- Complete AFSP education if you want the additional qualification.
- Stay current with federal and Washington tax rules.
Final Takeaway
The main answer to how to become a tax preparer in Washington State is simple: obtain a valid IRS PTIN, meet applicable Washington business requirements, develop reliable tax knowledge, and follow IRS rules for paid preparers.
AFSP participation is optional, but it can demonstrate ongoing education and provide limited representation rights. For clients, an AFSP Record of Completion is one factor to consider when evaluating a tax professional.
To discuss tax preparation or accounting support for the 2025 tax year, contact Statewide Tax Services.