Tag: CTEC
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 TrainingWhat Can I Do With My CTEC Certification?
An education in state and/or federal taxation goes a long way. There are several ways you can use your tax education if you get your CTEC certification or other various tax credentials.
1. Boost Your Career: A tax certification demonstrates your financial literacy and sets you apart in the job market. Even if you're newer to the financial industry, interviewing while already certified shows that you are serious about and ready for this new job. It's especially valuable for roles in tax preparation, bookkeeping, accounting, finance, or mortgage lending.
2. Help Family and Friends: Even if you decide not to become a professional tax preparer, you can become the tax whiz in your social circle! With your newfound knowledge, you can confidently answer questions and offer guidance to loved ones, saving them time and potentially money on their tax returns.
3. Start Your Own Tax Prep Business: Tax preparers are always in demand during tax season, but you may not realize that tax professionals are retiring faster than they can be replaced. Having a tax certification allows you to start your own tax preparation business and offer basic tax preparation services to friends, family, or even a wider clientele. As you gain more experience, you can increase your tax preparation service offerings and your revenue!
4. Save Money and Time: Understanding tax deductions, credits, and filing requirements can mean significant savings come tax season. You'll be able to confidently navigate tax forms and software, avoiding costly mistakes or missed opportunities.
Other Tax Education and Certification Options:
- IRS Annual Filing Season Program: This is the basic competency program for professional tax preparers.
- State Specific Tax Training: Many states, such as California and Maryland, require state-specific tax preparation registration and training.
- Niche Tax Avenues: Some specific areas in the field of taxation have special designations and benefits such as the IRS Acceptance Agent program.