EA Part 1 Quick Facts
| Detail | Info |
|---|---|
| Number of Questions | 100 multiple-choice questions |
| Time Limit | 3 hours 30 minutes |
| Passing Score | Scaled score of 105 out of 150 |
| Prerequisites | None — any person can sit for the exam |
| Exam Fee | ~$206 per attempt (2024–2025 fee) |
| Pass Rate | ~70% |
| Typical Study Time | 80–120 hours over 6–10 weeks |
| Testing Format | Prometric test centers nationwide |
| Exam Window | May 1 – February 28 annually (closed in March–April for updating) |
| Validity | Passing score valid for 2 years; must pass all 3 parts within 2-year window |
What the EA Part 1 Exam Tests
The Enrolled Agent Special Enrollment Examination Part 1 tests your mastery of federal income tax law as it applies to individual taxpayers. This means individual returns (Form 1040 and all its schedules), the rules governing what counts as gross income, how deductions and credits reduce tax liability, and how special tax situations — self-employment, rental income, sale of a home, retirement distributions — are handled under the Internal Revenue Code.
The exam is developed and administered by Prometric under contract with the IRS. It is updated annually to reflect the most recent tax year's rules, which is why the testing window closes in March and April — to allow IRS time to update the question bank for the coming year.
Unlike the CFP or CPA exam, Part 1 is entirely knowledge-application based with no case vignettes and no essay questions. Every question is multiple choice with four answer choices. There is no penalty for guessing — always answer every question.
The key difference between passing and failing Part 1 is depth. Many candidates have a general familiarity with tax concepts from filing their own returns or doing basic tax prep, but the EA exam probes the specific rules, thresholds, phase-outs, and exceptions that separate a tax professional from a layperson. You must know the exact AGI phase-out range for Roth IRA contributions, the exact criteria for qualifying as head of household, and the exact treatment of losses from passive rental activities — not just the general concept.
Topic Breakdown with Percentages
Preliminary Work & Taxpayer Data — 17%
Filing status rules (married filing jointly, married filing separately, head of household, qualifying surviving spouse, single) — and critically, the specific tests that must be met for each. Dependency rules under the Qualifying Child and Qualifying Relative tests. Filing requirements and due dates. Extension procedures (Form 4868). Who must file (income thresholds by age and filing status). Estimated tax payments (Form 1040-ES) and underpayment penalties. Basic recordkeeping and documentation requirements.
Key memorization items: Head of household requires the taxpayer to be unmarried, pay more than half the cost of maintaining a home, and have a qualifying person live there for more than half the year. The qualifying child tests: relationship, age (under 19, under 24 if full-time student, or permanently disabled), residency, support (child cannot provide more than half of own support), and joint return.
Income & Assets — 21%
Gross income inclusions and exclusions. Wages, salaries, tips, and compensation in kind. Interest income (taxable vs. tax-exempt municipal bond interest). Dividend income (ordinary vs. qualified dividends). Capital gains and losses (short-term vs. long-term, netting rules, special rates for collectibles and Section 1250 property, 0%/15%/20% brackets for long-term gains). Sale of personal residence (Section 121 exclusion — $250,000 single / $500,000 MFJ, ownership and use tests). Rental income and expenses. Alimony (pre-2019 divorces vs. post-2018 — critical distinction). Cancellation of debt income and exceptions (insolvency, qualified principal residence debt). Barter income. Prizes and awards. Social Security income (taxability thresholds: 50% and 85% inclusion rules). Gambling winnings and losses.
Deductions & Credits — 21%
Above-the-line deductions (adjustments to AGI): Student loan interest, educator expenses ($300 single/$600 MFJ), HSA contributions, self-employment tax deduction (50%), alimony paid (pre-2019), IRA deduction (phase-outs for active participants), moving expenses (military only post-TCJA).
Below-the-line deductions (itemized vs. standard): Standard deduction amounts by filing status. Itemized deductions: SALT (capped at $10,000), mortgage interest (acquisition debt limits), charitable contributions (cash limits as % of AGI, non-cash property rules, substantiation requirements), medical expenses (threshold: 7.5% of AGI), casualty losses (federally declared disaster areas only, post-TCJA). Miscellaneous itemized deductions (suspended post-TCJA).
Credits: Child Tax Credit and Additional Child Tax Credit (income phase-outs, refundable portion). Earned Income Tax Credit (income limits, investment income limit, qualifying child requirements — high exam priority). Child and Dependent Care Credit (expenses limits, income phase-out, percentage tables). Education credits: American Opportunity Credit (first 4 years of post-secondary, 40% refundable, $2,500 max, phase-outs) vs. Lifetime Learning Credit (no year limit, not refundable, $2,000 max, phase-outs). Retirement Savings Contributions Credit (Saver's Credit). Premium Tax Credit for ACA coverage. Foreign Tax Credit.
Taxation & Advice — 15%
Computing tax liability: applying the tax rate schedules, calculating AMT (Form 6251), self-employment tax (Schedule SE — 15.3% on net SE income, deductibility of half), Net Investment Income Tax (3.8% surtax on lesser of NII or excess of MAGI over threshold: $200K single / $250K MFJ), Additional Medicare Tax (0.9% on wages/SE income over same thresholds).
Qualified Business Income (QBI) deduction under Section 199A: 20% deduction for pass-through income, W-2 wage limitation and UBIA of qualified property limitation, specified service trade or business (SSTB) phase-out. This is heavily tested and requires understanding when the deduction is limited.
Estimated tax requirements. Tax withholding (W-4 basics). Amended returns (Form 1040-X, 3-year deadline). Statute of limitations (3 years general, 6 years for omission of 25%+ of gross income, no limit for fraud/failure to file). Interest and penalties (failure to file: 5% per month up to 25%; failure to pay: 0.5% per month up to 25%).
Specialized Returns for Individuals — 26%
This is the largest domain — it covers the income and tax rules for taxpayers in specific situations that require specialized knowledge.
Self-employment: Schedule C income, allowable business deductions (ordinary and necessary), home office deduction (regular and exclusive use, simplified vs. actual expense method), vehicle expenses (standard mileage vs. actual), depreciation (MACRS, Section 179 expensing, bonus depreciation). Self-employed health insurance deduction.
Retirement accounts: Traditional IRA (deductibility rules, non-deductible contributions and Form 8606, rollover rules), Roth IRA (contribution limits, income phase-outs, conversion rules, ordering rules for distributions), SEP-IRA (25% of compensation or $69,000 limit for 2024), SIMPLE IRA (contribution limits, two-year rule for distributions), 401(k) elective deferral limits. Required Minimum Distribution rules (age 73 under SECURE 2.0). Early distribution penalty (10%) and exceptions (first home, disability, substantially equal payments, higher education expenses, health insurance premiums for unemployed, etc.).
Rental real estate: Schedule E, passive activity loss rules, the $25,000 rental loss allowance for active participants (phases out $100K–$150K AGI), depreciation of rental property (residential: 27.5 years, commercial: 39 years), vacation home rules (14-day / 10% rule).
Farming: Schedule F, cash vs. accrual methods, farm income averaging.
Fiduciary returns: Very basic overview for individuals (Schedule K-1 income from trusts/estates).
Who Needs the EA Part 1 Credential (and the Full EA)
Part 1 is the first step toward becoming an Enrolled Agent, which is the highest credential granted by the IRS. EAs have unlimited representation rights before the IRS. Specific professionals who pursue it include:
- Tax preparers at national firms (H&R Block, Jackson Hewitt, Liberty Tax) or independent practices seeking to expand their credentials and client base
- Bookkeepers and accountants who want to add IRS representation to their service offerings
- CPAs and attorneys who want to demonstrate specific IRS procedural expertise
- Payroll professionals expanding into broader tax advisory
- Former IRS employees (who can apply for EA status via non-examination pathway after 5 years of technical service)
- Anyone building a career in individual or small business tax preparation and advisory
The EA credential is federally licensed — unlike a CPA, an EA can represent clients in any state without additional state licensing. For a tax professional who works primarily in individual and small business federal taxation, the EA is often more directly relevant than a state CPA license.
Difficulty and Pass Rate
Part 1 has an approximate 70% pass rate, making it the second most-passable of the three parts (Part 3 is the easiest). That said, the exam is not easy. The IRS intentionally writes questions to trap candidates who know the general rule but not the specific exception, phase-out threshold, or procedural nuance.
Why candidates fail Part 1:
- Relying on practical experience without learning the actual IRC rules. Experienced tax preparers sometimes assume they know the material — and then fail because the exam tests specific statutory rules, not intuitive tax sense.
- Weak capital gains knowledge. The netting rules for capital gains and losses (short-term vs. long-term, how to net within each category and then across categories) confuse many candidates.
- Passive activity rules. The interaction of at-risk limits, passive activity loss rules, and the rental real estate exception is one of the most tested and most commonly missed topics.
- QBI deduction complexity. Section 199A is relatively new and the limitations (W-2 wages, UBIA, SSTB phase-outs) are genuinely complex.
- Filing status edge cases. The difference between "qualifying child" and "qualifying relative" for dependency purposes, and the specific tests for head of household, are frequently tested with tricky scenarios.
Step-by-Step Study Timeline (6–10 Weeks)
Week 1: Tax Fundamentals and Filing Status
Master the foundational concepts: gross income, AGI, taxable income, tax liability. Learn every filing status cold — single, MFJ, MFS, HOH, qualifying surviving spouse — with their specific qualifying tests. Understand the dependency rules (qualifying child vs. qualifying relative) — these appear on virtually every exam form.
Week 2: Income Items
Work through every income category: wages, interest, dividends (ordinary vs. qualified), capital gains (learn the netting rules), business income, rental income, Social Security taxation, alimony distinctions (pre-2019 vs. post-2018), and exclusions (gifts, inheritances, life insurance proceeds, qualified fringe benefits).
Week 3: Deductions — Adjustments and Itemized
Above-the-line deductions (IRA deduction phase-outs, student loan interest, SE tax deduction, self-employed health insurance). Itemized deductions: SALT cap, mortgage interest limits, charitable contribution percentages and documentation rules, medical expense threshold, and the post-TCJA changes that suspended many deductions.
Week 4: Credits and Tax Calculations
All major credits: EITC (income limits, investment income limit, qualifying child rules), Child Tax Credit, dependent care credit, education credits (AOC vs. LLC differences). AMT basics. SE tax calculation. Net Investment Income Tax and Additional Medicare Tax thresholds. QBI deduction (Section 199A).
Week 5: Retirement Accounts
This is critical. Traditional IRA rules (deductibility, phase-outs for active participants), Roth IRA (contribution phase-outs, conversion, ordering rules), SEP-IRA, SIMPLE IRA, 401(k) limits. RMD rules (SECURE Act 2.0 — age 73 starting age, 10-year rule for inherited accounts). Early distribution penalty and all exceptions. Rollovers (direct vs. 60-day, once-per-year IRA rollover rule).
Week 6: Specialized Returns (Self-Employment, Rental, AMT)
Schedule C deductions (ordinary and necessary standard), home office (both calculation methods), vehicle expenses, depreciation basics (Section 179, bonus depreciation). Passive activity rules and rental real estate in depth. Vacation home rules. Review statute of limitations and penalties.
Week 7–8: Practice, Practice, Practice
Work through 500–700 practice questions. Review every wrong answer in detail. Identify your weak domains and return to the relevant study material. Take at least one full timed practice exam (100 questions, 3h 30m) to simulate the real experience.
Week 9–10 (if needed): Targeted Weak Area Review
Based on your practice exam results, focus intensively on your bottom two or three topic areas. Final week: review summary notes only. Know the major thresholds and phase-out ranges cold (these change with inflation adjustments annually).
Study Strategy: How to Actually Pass
High-Yield Topics — Prioritize These
- Specialized Returns (26%) — Self-employment income, passive activity rules, retirement account rules. More than a quarter of the exam.
- Income & Assets (21%) — Capital gains netting, Social Security taxation, Section 121 home sale exclusion, qualified dividends.
- Deductions & Credits (21%) — EITC rules (major exam topic), education credits, IRA deductibility phase-outs.
Numbers You Must Memorize
These change annually with inflation adjustments — verify them for the current exam year:
- Standard deduction amounts (single, MFJ, HOH, MFS)
- IRA contribution limits and income phase-out ranges (traditional deductibility, Roth eligibility)
- 401(k) / SEP-IRA / SIMPLE IRA contribution limits
- EITC income limits and investment income cap
- Capital gains rate thresholds (0%, 15%, 20%)
- AMT exemption amounts and phase-outs
- Child Tax Credit income phase-out ($200K single / $400K MFJ under TCJA)
- NIIT and Additional Medicare Tax thresholds
- Section 121 exclusion ($250K / $500K)
- Casualty loss 10% of AGI floor and $100 per-event floor (disaster areas only)
Use a Good Prep Provider
Top EA Part 1 prep providers: Gleim EA Review, Fast Forward Academy, Surgent EA Review, and Passkey Learning Systems. Each publishes an annual study guide updated for the current tax year. The Passkey EA Workbook is particularly well-regarded for its practice question depth. Do not use outdated materials — tax law changes every year.
The Hardest Topics Explained
1. Passive Activity Loss Rules, At-Risk Rules, and the Rental Exception
The Basic Passive Activity Rule: Losses from passive activities can only offset passive income — they cannot offset wages, interest, dividends, or active business income. A passive activity is one in which the taxpayer does not materially participate. Material participation requires meeting one of seven tests, the most common being participation for more than 500 hours during the year.
Rental Activities: Rental activities are automatically treated as passive regardless of participation, with one key exception: the $25,000 rental loss allowance. Taxpayers who actively participate (a lower standard than material participation — basically, making management decisions) in rental real estate can deduct up to $25,000 of rental losses against ordinary income. This phase-out begins at $100,000 AGI and is fully phased out at $150,000 AGI. Above $150,000 AGI, rental losses are passive and can only offset passive income.
Real Estate Professionals: Taxpayers who spend more than 750 hours per year in real estate activities and for whom real estate work constitutes more than 50% of their personal services for the year are classified as real estate professionals. Their rental activities are not automatically passive — they must still meet a material participation test for each property (or aggregate all rental activities with a grouping election).
At-Risk Rules: Before the passive activity rules even apply, losses are limited by the at-risk rules under IRC Section 465. A taxpayer is only "at-risk" for amounts they actually invested or borrowed personally (recourse debt). Non-recourse financing (common in real estate limited partnerships) does not add to the at-risk basis — with an exception for qualified real estate non-recourse financing.
2. Capital Gains: Netting Rules and Special Rates
Many candidates know that long-term capital gains are taxed at preferential rates, but the netting rules trip up even experienced tax preparers.
Step 1: Net all short-term transactions (held 1 year or less) together. This produces either a net short-term gain (NSTG) or net short-term loss (NSTL).
Step 2: Net all long-term transactions (held more than 1 year) together. This produces either a net long-term gain (NLTG) or net long-term loss (NLTL).
Step 3: If you have both a NSTG and a NLTL, or a NSTL and a NLTG, cross-net them.
Results: A net capital gain is the excess of net long-term gains over net short-term losses. This amount is eligible for preferential rates (0%, 15%, or 20% depending on taxable income). A net capital loss can offset up to $3,000 of ordinary income per year; excess carries forward indefinitely.
Special rates: Gains from collectibles (coins, art, rugs) are taxed at a maximum 28%. Unrecaptured Section 1250 gain (depreciation recapture on real property) is taxed at a maximum 25%. Qualified small business stock (Section 1202) gains may be 100% excludable.
3. Self-Employment Income and the QBI Deduction
Self-Employment Tax: Net self-employment income (net profit from Schedule C) is subject to the self-employment tax at 15.3% (12.4% Social Security + 2.9% Medicare) on the first $168,600 of net SE income (2024 SS wage base), plus 2.9% Medicare on all net SE income above that, plus 0.9% Additional Medicare Tax on net SE income above $200,000 (single) or $250,000 (MFJ). The taxpayer may deduct 50% of the SE tax as an above-the-line deduction when calculating AGI.
QBI Deduction (Section 199A): Self-employed individuals and pass-through business owners may deduct up to 20% of their qualified business income. The deduction is limited to the lesser of: (1) 20% of QBI, or (2) the greater of 50% of W-2 wages paid by the business OR 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property. This W-2/UBIA limitation only applies when taxable income exceeds the threshold ($191,950 single / $383,900 MFJ for 2024). Specified service trades or businesses (SSTBs) — health, law, consulting, financial services, etc. — are ineligible for the QBI deduction once income exceeds the phase-out range.
4. Retirement Account Contribution and Distribution Rules
IRA Contribution Limits and Deductibility: For 2024, the IRA contribution limit is $7,000 ($8,000 if age 50+). Roth IRA contributions phase out between $146,000–$161,000 AGI (single) and $230,000–$240,000 AGI (MFJ). Traditional IRA deductibility phases out between $77,000–$87,000 (single active participant) and $123,000–$143,000 (MFJ where contributing spouse is active participant in employer plan). A non-active-participant spouse has a higher phase-out: $230,000–$240,000 MFJ.
Early Distribution Penalty: Distributions before age 59½ are subject to a 10% penalty plus ordinary income tax. Exceptions include: substantially equal periodic payments (72(t)), disability, death, first-time home purchase (up to $10,000 lifetime from IRA), qualified higher education expenses, health insurance premiums while unemployed (12+ weeks), unreimbursed medical expenses over 7.5% of AGI, IRS levy, qualified reservist distributions, and disaster distributions.
SECURE Act 2.0 Changes: RMDs now begin at age 73 (for those born 1951–1959) and will begin at age 75 for those born in 1960 or later. The penalty for missing an RMD is 25% (reduced from 50%), further reduced to 10% if corrected within a correction window. Roth accounts in employer plans are no longer subject to RMDs during the account owner's lifetime (effective 2024). Catch-up contributions for ages 60–63 are enhanced to the greater of $10,000 or 150% of the regular catch-up amount.
Practice Question Strategy
Target 500–700 Questions Minimum
EA Part 1 has a 70% pass rate, but candidates who only do a cursory review of the material often cluster near the failing boundary. 500–700 practice questions, used actively (reviewing every missed answer), puts most prepared candidates in a comfortable passing range.
Focus on the Domain With the Most Questions
Specialized Returns (26%) will generate roughly 26 questions on your actual exam. Every hour spent mastering self-employment income, passive activity rules, and retirement account rules has outsized return. Spend at least 30% of your question practice time in this domain.
Learn the Exact Thresholds
A large portion of incorrect answers come from candidates who know the rule exists but are fuzzy on the exact dollar threshold. EITC income limits, IRA phase-out ranges, the Social Security combined income thresholds (50% and 85% inclusion), the $25,000 rental loss allowance and its phase-out — memorize these precisely.
Take the Exam When You Are Consistently Scoring 80%+ on Full Practice Exams
The passing scaled score of 105/150 corresponds to roughly 70% of questions correct (though the exact conversion varies). Candidates who consistently score 80%+ on practice exams are well-positioned to pass. Do not schedule your exam if you are consistently scoring in the low-to-mid 70s on practice tests — spend another week or two on weak areas first.
Exam Day Logistics
Registration: Register for your exam at prometric.com. Search for EA SEE Part 1. Select a test center (or choose online proctoring where available) and schedule your appointment at least 2–3 weeks in advance for the best date/time options.
Fees: Approximately $206 per attempt for 2024–2025. Fees are paid at registration and are non-refundable for no-shows.
What to Bring: One government-issued photo ID that matches your Prometric registration name exactly. Prometric provides scratch paper and pencils. No personal items, calculators, or notes are allowed in the testing room.
Testing Window: The exam is available from May 1 through the last day of February each year. The window is closed in March and April while the IRS updates the question bank. You can take the exam at any point during the open window.
Scoring: Scores are reported immediately upon completion at the testing center. You receive a printed score report. A score of 105 or higher is passing. Failing candidates receive a diagnostic report showing performance by content area.
Retakes: You may retake the exam up to four times per testing window (5 attempts per year total). There is no mandatory waiting period between attempts, though prudent preparation time between retakes is obviously advisable.
Frequently Asked Questions
Q: Can I take the EA exam parts in any order? Yes. The IRS does not require you to take the parts in sequence. Most candidates start with Part 1 (Individuals) because it is the most familiar territory, but you can start with any part. The 2-year window for passing all three parts begins from the date you pass your first part.
Q: Do I need to be a tax professional to sit for Part 1? No. There are no prerequisites — any adult can register and sit for the exam. You do not need to be a CPA, attorney, or current tax preparer.
Q: How long is my passing score valid? A passing score on any part is valid for 2 years. You must pass all three parts within that 2-year window. If you pass Part 1 and then fail to pass Parts 2 and 3 within 2 years, the Part 1 credit expires and you must retake it.
Q: Does Part 1 cover state income taxes? No. All three parts of the SEE test federal tax law only. State tax rules are not tested.
Q: What tax year does the exam cover? The exam tests tax law for the most recently completed tax year. The exam window from May 2025 through February 2026 covers tax year 2024. Always confirm the current exam year with Prometric or the IRS before purchasing study materials.
Q: Is the EA exam harder than the CPA exam? Broadly speaking, the full EA exam (all three parts combined) is generally considered less difficult than the full CPA exam (four parts). However, Part 2 of the EA is genuinely difficult, and the individual parts of the EA — particularly Part 1 and Part 2 — require deep technical knowledge that goes far beyond what most tax preparers encounter in everyday practice.