How to Register as a Tax Preparer in California
Unlike most states, California has strict guidelines for defining who can and cannot prepare tax returns in a professional manner. California law requires anyone who prepares state and federal tax returns for a fee, and who is not a licensed attorney, certified public accountant (CPA), or enrolled agent (EA), to register with the Council on Tax Education. California (CTEC). Tax preparers caught breaking the law can face fines of 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 ctec.org and click on “Approved Education Providers.”
Applicants have 18 months from the course completion date to register, purchase a voucher, and become a CTEC Registered Tax Preparer (CRTP). If you wait more 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 before October 31 of each year.
• Take a 60-hour qualifying education course (45 federal and 15 state hours) and pass a proficiency test from a CTEC-approved education provider.
• Buy at $ 5,000 in tax to prepare a bond.
• Submit your application (online or by mail) to CTEC. The registration fee is $ 25.
• CTEC will issue you a Certificate of Completion and a registration card.
• 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.
• Keep your tax of $ 5,000 to prepare a bond.
• Submit your renewal application (online or by mail) to CTEC. The enrollment fee is $ 25. If you do not renew by the October 31 deadline, a late fee of $ 15 will apply.
• CTEC will issue you a Certificate of Compliance and a registration card.
What happens if I don’t complete the CTEC Continuing Education (CE) requirement by the deadline?
CRTPs who do not complete the required 20 hours of continuing education by the October 31 deadline cannot renew until they do, which means their registration will become delinquent. By law, CRTPs cannot prepare tax returns for a fee until their record is up to date.
How do I get a tax preparer bond?
Many insurance companies offer tax preparer bonuses. 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 do I prepare California tax returns?
The law is limited to supervising tax preparers who prepare state and federal tax returns for a fee within the state of California.
What if I only help prepare the tax returns, but don’t sign them?
Lawyers, CPA and EA employees are exempt from CTEC registration as long as they do not sign the tax return. If the employee signs the tax return, they must register with CTEC.
Other people who prepare or assist with the preparation of 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 the CTEC registration, visit http://www.ftb.ca.gov and search for “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 an attorney, CPA, CRTP, or EA.
What if I only plan to prepare state tax returns for a fee? Do I still need to 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, and / or sign federal tax returns for a fee.