To prepare tax returns for pay in California, you must either hold an exempt professional credential or register with the California Tax Education Council (CTEC). The California tax preparer requirements for a non-credentialed preparer are a 60-hour qualifying education course, a $5,000 surety bond, an IRS Preparer Tax Identification Number (PTIN), a Live Scan background check, and a $102 application fee. Once registered, you renew every year by October 31 with 20 hours of continuing education and a $35 fee.
Who Has to Register
California’s Tax Preparation Act reaches anyone who prepares or assists in preparing state or federal returns for another person for a fee, holds themselves out as offering tax preparation, or takes final responsibility for a return someone else started.1California Legislative Information. California Code BPC 22251 – Tax Preparers
Four groups are exempt because they already answer to a licensing body:
- Certified Public Accountants licensed by the California Board of Accountancy
- Attorneys who are active members of the California State Bar
- Enrolled Agents authorized to practice before the IRS
- Certain banking and trust officials
Employees working within the scope of employment for an exempt professional are also exempt.2California Tax Education Council. Understanding CTEC Exemptions One detail catches people off guard: an inactive Enrolled Agent doing business in California is not exempt and must register with CTEC.
Qualifying Education and Exam
The standard path starts with a 60-hour qualifying course from a CTEC-approved provider, completed within the 18 months before you register. The hours split into 45 hours of federal tax curriculum (including 2 hours of ethics) and 15 hours of California tax curriculum.3California Legislative Information. California Code BPC 22255 – Tax Preparers
Coursework alone is not enough. You must also pass a final exam covering both federal and California topics: at least 225 federal questions and at least 75 California questions, scored separately, with a 70% minimum on each section.4California Tax Education Council. CP13A – Qualifying Education Courses The exam is administered by your education provider, not CTEC, and some providers give it as a take-home test.
PTIN, Background Check, and Application Fee
Before CTEC will approve you, three other pieces need to be in place.
Every paid preparer in the country needs an IRS Preparer Tax Identification Number, and CTEC won’t register you without one. For the renewal cycle that began October 16, 2025, the PTIN fee is $10 to the IRS plus $8.75 to a third-party contractor, for a total of $18.75 per year.5Internal Revenue Service. Treasury, IRS Issue Regulations to Reduce the Amount of the User Fee for Tax Professionals Who Apply for or Renew a PTIN The application asks about felony convictions. A past conviction won’t necessarily disqualify you, but being currently incarcerated generally will.6Taxpayer Advocate Service. Getting a PTIN
New applicants must also pass a California Live Scan background check. You schedule the fingerprinting at a local Live Scan location, using forms CTEC provides through your online account after you start the application.7California Tax Education Council. CTEC Tax Preparer New Application
The CTEC application itself costs $100 plus a $2 processing fee, for $102 total. It is nonrefundable.8Franchise Tax Board. Registered Tax Preparers After CTEC verifies your education, bond, PTIN, and background check, you are a California Registered Tax Preparer (CRTP).
The $5,000 Surety Bond
Every CRTP must carry a surety bond of at least $5,000 from a company authorized to do business in California. The bond gives clients a way to recover money if the preparer commits fraud or dishonesty, and you must furnish proof both at initial registration and at each renewal.3California Legislative Information. California Code BPC 22255 – Tax Preparers
The bond does not cost $5,000. You pay an annual premium to the surety company, typically around $25 to $100 for applicants with clean records, and higher if you have credit problems or prior claims. If the bond lapses, your CTEC registration falls out of compliance, so the bond’s renewal date matters as much as CTEC’s.
Annual Renewal and Continuing Education
CTEC registration runs on a November 1 to October 31 cycle. You renew and pay $33, plus a $2 processing fee, before October 31 each year.8Franchise Tax Board. Registered Tax Preparers That $35 is separate from your PTIN renewal and your bond premium, both of which also have to stay active.
Each renewal requires 20 hours of continuing education from a CTEC-approved provider:3California Legislative Information. California Code BPC 22255 – Tax Preparers
- 10 hours of federal tax law
- 3 hours of federal tax law updates
- 2 hours of ethics
- 5 hours of California tax law
Missing October 31 gets expensive fast. From November 1 through January 15, you can still renew, but CTEC adds a $55 late fee to the $35 renewal for a total of $90.9California Tax Education Council. Late Renewals Reminder Miss January 15, and your registration expires. CTEC then treats you as a brand-new applicant: retake the full 60-hour qualifying course, redo the background check, and pay the $102 new applicant fee.10California Tax Education Council. TP02 – Tax Preparer Registration Requirements This is the part of the system that catches people every year.
Penalties for Preparing Without Registration
Preparing California tax returns for pay without CTEC registration (or an exempt credential) draws a Franchise Tax Board penalty of $2,500 for the first violation and $5,000 for each subsequent violation.11California Tax Education Council. Enforcement
One narrow escape hatch: if you can provide proof of a valid credential to the FTB within 90 days of the penalty notice being mailed, the penalty may be waived. That helps someone who already had a credential and simply didn’t register on time. If you were never qualified, the penalty stands.
Experience Instead of Education for Lapsed Credentials
If you recently held a California CPA license, active bar membership, or an EA credential and it lapsed within the past two years, you may not have to take the full 60-hour course. California law lets former exempt preparers petition CTEC to count their experience toward the education requirement, provided they prepared at least 100 tax returns during the two years before applying.3California Legislative Information. California Code BPC 22255 – Tax Preparers
The same pathway is open to professionals previously licensed in another state who have moved to California. Out-of-state practitioners who qualify still have to complete a 15-hour California-specific course, because their prior experience wouldn’t have covered California tax law.12California Tax Education Council. TP04 – Experience In Lieu Of Education Everything else, including the surety bond, PTIN, and background check, still applies.
Watch the 2028 Sunset Date
California’s Tax Preparation Act has a built-in expiration. The current version is scheduled to be repealed on January 1, 2028, unless the legislature extends it.13California Legislative Information. California Code BPC 22250 – Tax Preparation Act The legislature has renewed the Act several times before, so a further extension is likely, but if you’re building a career around this registration, the renewal legislation is worth tracking as 2028 approaches.