How to Register as a Tax Preparer in California Unlike most states, California has strict guidelines to define who can and cannot prepare tax returns professionally. California law requires that anyone who prepares state and federal tax returns for a fee, and is not a licensed attorney, certified public accountant (CPA) or enrolled agent (EA), to register with the California Tax Education Council (CTEC). Tax preparers caught breaking the law may face penalties up to $5,000 from the California Franchise Tax Board.
How do I register with CTEC? The first step is to complete a 60-hour qualifying education course from a CTEC-approved education provider. To find an education provider, visit somekeyword and click on -Approved Education Providers.-
Applicants have 18 months from the date of completing the course to register, purchase a bond and become a CTEC-registered tax preparer (CRTP). If you wait longer than 18 months, you will have to retake the 60-hour course and exam.
You can register online or by mail. CRTPs must renew their CTEC registration by October 31st of each year.
Initial Registration Take a 60-hour qualifying education course (45 federal and 15 state hours) and pass a competency test from a CTEC-approved education provider. Purchase a $5,000 tax preparer surety bond. Submit your application (online or by mail) to CTEC. The registration fee is $25. CTEC will issue you a Certificate of Completion and registration card.
Renewal Registration Take a 20-hour continuing education course (12 federal, 4 state, 2 ethics, 2 federal and/or state hours) from a CTEC-approved education provider(s). Maintain your $5,000 tax preparer surety bond. Submit your renewal application (online or by mail) to CTEC. The registration fee is $25. If you fail to renew by the October 31st deadline, a $15 late fee will be enforced. CTEC will issue you a Certificate of Compliance and registration card.
What happens if I do not complete the CTEC continuing education (CE) requirement by the deadline? CRTPs who do not complete the required 20-hours of continuing education before the October 31st deadline cannot renew until they do so, which means their registration will become delinquent. By law, CRTPs cannot prepare tax returns for a fee until their registration is current.
How do I get a tax preparer bond? Many insurance companies offer tax preparer bonds. An insurance agent or advisor can make recommendations. CTEC does not provide a list of bond companies.
What if I live outside of California, but I prepare California tax returns? The law is limited to overseeing tax preparers who are preparing state and federal tax returns for a fee within the State of California.
What if I only assist with preparing tax returns, but do not sign it? Employees of attorneys, CPAs and EAs are exempt from CTEC registration as long as they do not sign the tax return. If the employee signs the tax return, he/she must register with CTEC.
Other individuals who prepare or assist with preparing state and federal tax returns must also register with CTEC even if they do not sign the tax return. For more information on who is exempt from CTEC registration, visit www.ftb.ca.gov and search -CTEC Registration.-
What if I only plan to prepare federal tax returns for a fee? Do I still need to register with CTEC? Yes, anyone who prepares federal and state tax returns for a fee within the State of California must be either an attorney, CPA, CRTP or EA.
What if I only plan to prepare state tax returns for a fee? Do I still need register with the IRS? No, the tax preparer will only need to comply with California requirements. The new IRS regulation is limited to tax preparers who prepare, assist with and/or sign federal tax returns for a fee. For more information regarding IRS registration requirements, please visit www.irs.gov/taxpros.
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