As a registered tax preparer in California, you must follow the California Tax Education Council’s (CTEC) laws and regulations. It implies you must complete the mandatory California 60-hour tax course to register with CTEC and take CTEC continuing education classes to renew CTEC membership every year.
What is CTEC?
CTEC is a non-profit corporation based in California that registers tax preparers. It is the second biggest group of tax preparers in the state behind certified public accountants.
CTEC registration is required for anybody who assists with or prepares a state or federal income tax return for a fee, except for exempted professionals.
The corporation is also responsible for authorizing tax education providers and maintaining and disseminating a list of those recognized providers to the public.
Who Is Required to Register With The CTEC?
Anyone who assists with or prepares state or federal income tax returns for a charge in California must take a 60-hour CTEC tax education class and then enroll with CTEC, as per state law.
All of the following, however, are exempted from CTEC registration:
- Certified Public Accountants who are members of the California State Bar (CPAs)
- Agents who are registered (EAs)
- Officials from specific banks or trusted companies
If you don’t qualify for any exemptions and wish to work as a professional tax preparer in California, it’s time to become a CTEC-Registered Tax Preparer.
Steps to Obtaining CTEC Registration as a Tax Preparer
You must follow various stages if you want to become a CTEC-Registered Tax Preparer (CTRP) for the first time.
- Within 18 months after registering with CTEC, you must complete a qualified 60-hour CTEC tax education course.
- A $5,000 tax preparer bond must be purchased.
- The IRS will issue you a Preparer Tax Identification Number (PTIN).
- Finally, you must register with CTEC online and pay the $33 registration cost.
CTEC registered preparers need to submit fingerprints to CTEC for filing to the Department of Justice and undergo a background check.
CTEC will provide you with a Completion certificate and an identity card with your name, CTEC number, and the current year after everything has been confirmed and finalized.
Requirements for CTEC Renewal
CTEC requires you to complete at least 20 hours of California tax preparer training each year to renew CTEC membership. This CTEC continuing education (CE) must be obtained from a recognized educational institution. The federal tax curriculum must be covered for 15 hours, with the remaining five hours devoted to the California tax curriculum.
Luckily, there are several ways to fulfill the CE requirements for tax professionals. You have the option of taking your California tax preparer course hours online or in person. Choosing digital California tax preparer continuing education allows you to complete your hours whenever convenient for you.
However, that isn’t the only requirement for tax preparer renewal that you must meet.
The following are the steps you must take to renew your registration each year:
- Complete 20 hours of CTEC registration renewal training (15 federal, five states)
- Renew your PTIN or preparer tax identification number with the Internal Revenue Service (IRS).
- Keep the $5,000 bond you put up to receive your registration.
- CTEC can help you renew your registration.
- Pay the renewal cost that is required.
If you’re a non-exempt tax preparer who doesn’t register with CTEC before completing tax returns for a fee, you could face a $2,500 penalty. If you’re caught again, you’ll face a $5,000 fine.