Tax professionals who apply for or renew their preparer tax identification number (PTIN) will see a lower fee going forward. The IRS has finalized regulations reducing the PTIN user fee, bringing welcome relief to preparers who must maintain this number yearly.

Why the change was needed

For years, the PTIN fee was higher, but a court decision in 2023 found the prior fee structure excessive. That decision pushed the IRS and Treasury to revisit the fee calculation. Under federal law, agencies are permitted to charge user fees, but these fees must be based on the actual cost of providing the service. After reviewing the numbers and updating its cost model, the IRS settled on a new fee that more accurately reflects expenses.

The new PTIN fee amount

The final rule sets the IRS portion of the PTIN fee at $10, down from the previous $11. To arrive at the new number, the IRS built a cost model for the 2024-2026 period. This model looked at direct and indirect costs, including labor, overhead and the expense of maintaining systems that support PTIN applications. Those costs were divided by the number of expected applications that were expected to arrive at the current figure. By tying the fee directly to actual expenses, the IRS meets its obligation to ensure that user fees are fair and consistent with federal standards.

Preparers also pay a third-party contractor fee of $8.75, which covers system processing and maintenance. The contractor fee is locked in under the current contract until 2026, but it could be adjusted depending on new contract terms. The total cost per application or renewal is $18.75 starting Sept. 30, 2025. Applications received prior to that date will pay the $11 fee for a total of $19.75.

Who will see the lower PTIN fee

This fee applies to all individuals who prepare or assist in preparing federal tax returns for compensation. That includes independent preparers, those working in firms and others who must maintain a valid PTIN. The IRS estimates that more than 800,000 individuals apply or renew their PTIN each year, so the change affects a large portion of the profession.

Don’t forget about the new ID.me requirement

Beginning July 7, 2025, PTIN users with a Social Security number will be required to log in to the PTIN portal using ID.me credentials. The IRS has retired the old username and password login for these users. Creating an ID.me account requires a government-issued photo ID, a camera-enabled device and an email address. Once verified, the ID.me account can be used to access and manage PTIN applications securely. Preparers who already use ID.me for other government services can sign in with the same account.

Summary of the upcoming PTIN renewal season

For tax professionals, there are a few key points to keep in mind:

• The PTIN remains mandatory for anyone preparing federal returns for compensation.
• The total fee is now $18.75.
• The contractor fee could change in 2026 when the current contract expires.
• ID.me credentials are required for PTIN login beginning July 7, 2025.
• PTIN renewal is expected to open Oct. 16, 2025.

PTINs expire on Dec. 31 of the calendar year for which they are issued. Paid tax return preparers and enrolled agents, who need to apply for an initial PTIN or renew a PTIN expiring on Dec. 31, 2025, should use the online portal, which takes about 15 minutes to complete. A paper option, Form W-12, IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal, along with the instructions, are also available for PTIN applications and renewals. However, the paper form can take approximately six weeks to process (more if the government is shut down).