Category: State Specific Training
5 Things New Tax Preparers Need to Know About Their California Tax License
1. All tax preparers practicing in California must have at least one of the following tax certification credentials:
Certified Public Accountant (CPA)
Enrolled Agent (EA)
Attorney
CTEC Registered Tax Preparer (CRTP)
The CRTP designation is the easiest of these credentials to obtain and requires annual registration with the California Tax Education Council (CTEC). This registration is what people are referring to when they
use the term “California tax license”. This is a state level regulation and is not mandatory for federal level tax professionals with the designation of Certified Public Accountant (CPA), Enrolled Agent (EA), or Attorney.
2. New CTEC Registered Tax Preparers (CRTPs) must complete a 60 credit course covering California and Federal tax law as well as Ethics to be eligible to register with CTEC for their first year having a California Tax License.
3. CTEC Registered Tax Preparers (CRTPs) must complete 20 credits of annual continuing education annually after their first year of registration. In your first year of registration with CTEC for your California Tax License it is important to know August 1 st is the start/stop date for determining which tax season your California Tax License applies to. See our scenario examples below to help identify how to not get caught having to do both the 60 credit and 20 credit CTEC continuing education requirements in the same year.
Scenario 1
Bob is a brand new California tax preparer. He is not a EA, CPA or Attorney, so he must register with CTEC. Over the Summer of 2024 Bob completes his 60 credit California Tax preparer education course, finishing on July 5 th 2024, and immediately completes the enrollment steps and registers on CTEC’s website and pays the new applicant fee of $102 to get his California Tax License. Bob is now approved to be a tax preparer in California for the remaining portion of calendar year 2024. Bob Must complete an additional 20 hours of required training and re-register with CTEC to keep his California CTEC license active for calendar year 2025. This double requirement is due to his initial registration to CTEC being before August 1st 2024, when registration becomes available for the next year’s tax season.
Scenario 2
Chet is a brand new California tax preparer. He is not a EA, CPA or Attorney, so he must register with CTEC. Over the Summer of 2024 Chet completes his 60 credit California Tax preparer education course, finishing on August 15th 2024, immediately registers on CTEC’s website for the next tax season, and pays the new applicant fee of $102 to get his California Tax License. Chet is now a licensed CRTP through the end of 2025 calendar year. Chet does not have to meet any further registration requirements or continuing education courses until re-enrolling for the calendar year 2026. The key for Chet not having to also take the 20 hour course in the same short timeframe is the timing of registration being after August 1st, allowing for him to enroll through the end of 2025.
4. Just completing your 60 hour continuing education and or 20 hour requirements is not all you have to do to obtain your California Tax License. First year California Registered Tax Preparers (CRTPs) must also:
-Purchase and maintain a $5,000 Indemnity Bond. Don’t worry, these cost less than $20 - $50 per year.
-Complete a 1 time background check. Services provided locally in CA through Live Scan.
-Pay CTEC the new applicant registration fee: $102. Annual renewal fees thereafter drop to only $55.
5. In addition to maintaining your CTEC California Tax preparer license annually, you also need to apply for and renew annually your Preparer Tax ID Number (PTIN) with the IRS as well. This is done on the IRS tax pro website https://www.irs.gov/tax-professionals and at time of publishing costs $19.75 annual renewal.
Author Tina HarveyPosted on Categories California, State Specific TrainingWhy is CTEC so hard?
Tax education courses that are made for the California Tax Education Council (CTEC) are sometimes thought to be very challenging, more so than courses made for federal continuing education. CTEC is likely difficult because it deals with tax regulations and aims to ensure competency among tax preparers.
- Stricter Standards: CTEC holds its approved continuing education providers to a high standard because it wants to see the training create competent California tax preparers who were trained well to understand CA tax law.
- Keeping Up-to-Date: Tax laws and regulations can change every year. Staying up-to-date on tax law changes will help ensure that accurate tax returns are filed by the tax preparer, no matter the year.
- Focus on Proficiency: The idea behind tax preparer education competency requirements is to make sure tax preparers are truly proficient in their field. Being able to pass the test is great, but being proficient in your field will make your life easier and your business more lucrative!
If you're finding our CTEC course too challenging, please feel free to reach out to us. We may be able to provide some suggestions to help you in your studies!
Author Tina HarveyPosted on Categories California, State Specific Training