California is one of relatively few states in the US that have their own requirements for education and qualification to become a tax preparer. The process isn’t difficult, but if you don’t know it and don’t know to follow it, you can end up in legal trouble.
Start With A Qualifying Education Course
The process begins with a 60 hour qualifying education course. The provider must be approved by the California Tax Education Council (CTEC), which helps the agency gauge the quality of the education you received. A course taken within the past 18 months is eligible to meet this requirement. It is fairly common for a tax preparation business to offer classes that meet this requirement in California, but check to be sure before enrolling.
Meet The Bond And PTIN Requirements
Before applying to the CTEC, make sure that you have a Preparer Tax Identification Number from the IRS. This helps identify you both at the state and federal level, and also ensures that you are in compliance with new federal regulations that apply to everyone becoming a tax preparer. Finally, you’re required to hold a $5,000 tax preparer bond.
Submit Your Application
Once you meet all of the criteria above, you’re eligible to submit your application. Most people who work at a tax preparation business and directly prepare returns (rather than supporting with data entry, etc) are required to register. Attorneys, CPAs, and IRS enrolled agents are exempt from these requirements because they’re already registered.
Once you’ve successfully registered, it’s important to remember that you have to renew annually. There is a small fee for doing so, and you’ll have to do things like continue your education during the year and maintain your PTIN, but otherwise it requires little effort.
The goal of this entire process is to certify for the public that prep workers know exactly what they’re doing. The regulations also encourage continuing education and positive steps to always improve service. They may seem tedious, but once you’re used to them they are just another way to ensure that you’re giving your best to every client.