Anyone who prepares California or federal tax returns for a fee in California and is not a CPA with a current license, an enrolled agent, an attorney with the State Bar, or an employee supervised by one of them whose returns that person signs, must be registered with the California Tax Education Council. A first registration takes a 60-hour qualifying education course from a CTEC-approved provider, a Live Scan background check through the Department of Justice, an IRS PTIN, a $5,000 surety bond, a $102 application fee and a $35 registration fee. Keeping it takes 20 hours of continuing education a year, a current bond and PTIN, and a $35 renewal paid between August 1 and October 31. A renewal paid between November 1 and January 15 costs $55 more; after January 15 the registration is gone and the preparer starts over with the 60 hours, the Live Scan and the application fee. Preparing returns for a fee without registering draws a $2,500 penalty from the Franchise Tax Board for the first notice and $5,000 for each one after.
Everything below is taken from CTEC’s tax preparer pages, its 2026 renewal notices and its enforcement page, and from the text of the Tax Preparation Act as CTEC publishes it, read October 20, 2026 and linked at the end. CTEC does not teach; it approves providers and keeps the register. The last section covers what a buyer checks in a registered tax practice, because WIN buys them.
- 01Who registers: every non-exempt person who prepares or assists with a tax return for a fee, including inputting tax data into a computer. Exempt: active California CPAs and licensed firms, State Bar attorneys, enrolled agents, banks and trust companies, and their employees whose returns the exempt person signs (BPC 22258).
- 02First registration: 60 hours of qualifying education (45 federal, 15 California) within the previous 18 months, Live Scan and a Department of Justice background review of two to eight weeks, a PTIN, a $5,000 bond, $102 to apply and $35 to register. The application and the Live Scan are valid for three years.
- 03Annual renewal: 20 hours of continuing education (10 federal tax law, 3 federal update, 2 ethics, 5 California), a current bond and PTIN, and $35 ($33 registration plus a $2 processing fee). Renewal opens August 1 and is due October 31. The registration year runs November 1 to October 31.
- 04Late: November 1 to January 15, $55 late fee on top of the $35, and no paid preparation until the renewal is complete. After January 15 the registration expires and the preparer reapplies as new, including the 60 hours again.
- 05Enforcement: FTB issues a $2,500 penalty for the first failure to register, waived if proof of a valid credential reaches FTB within 90 days of the notice, and $5,000 for each subsequent failure. The Act itself sunsets January 1, 2028 unless the Legislature extends it (BPC 22259).
Who has to register, and who is exempt
The Tax Preparation Act, Business and Professions Code 22250 to 22259, defines a tax preparer as a person who, for a fee or other consideration, assists with or prepares tax returns for another person, or assumes final responsibility for a return on which someone else did the preliminary work, or holds themselves out as offering those services. Each such person is a separate preparer regardless of who employs them. A tax return means any return, declaration, statement, refund claim or other document required to be filed in connection with state or federal income taxes or California bank and corporation franchise taxes. The Act says in section 22258(c) that preparation includes the inputting of tax data into a computer, so the data-entry employee at a non-exempt firm is a preparer.
Section 22258, amended by SB 788 in 2025 for returns prepared for taxable years beginning on or after January 1, 2025, lists who is exempt.
| Exempt under BPC 22258 | Condition |
|---|---|
| An individual with a current and valid license from the California Board of Accountancy, or a practice privilege under BPC 5096 | The license must be current and valid; the Board’s FAQ says signing a return as a CPA requires an active license, so a CPA on inactive status who prepares for a fee has stepped outside this exemption (see the renewal article) |
| A licensed accountancy firm, with its partners, shareholders, owners and employees | The firm holds a current and valid Board license |
| An active member of the State Bar of California | Active status |
| A person enrolled to practice before the IRS (an enrolled agent) | Enrolled status under 31 CFR Part 10 |
| A trust company or trust business; a state or federally regulated financial institution | To the extent the tax preparation activity is subject to federal or state examination |
| An employee of any of the above | Only while supervised by an exempt person who reviews the return, signs it and is responsible for its content; all returns the employee prepares must be signed by an exempt person. An employee who signs a return must be exempt in their own right or registered |
| An employee of a registered entity preparer | Only if every return the employee prepares is signed by that entity |
| An employee who prepares the employer’s own income, sales or payroll returns as part of regular clerical duties | Not a tax preparer under 22251(a)(2) at all |
The practical test for a small firm: every person who touches a return for a fee is either exempt in their own right, or registered, or an employee whose every return is signed by someone exempt. The one that catches firms is the second preparer in a two-person office who signs returns in the owner’s absence and has never registered.
Your status and what you owe
Two inputs give the fee, the hours, the deadline and the next step for the 2026/2027 cycle, using today’s date against CTEC’s calendar. It does not know your bond or PTIN status; confirm both in your CTEC account.
Due to CTEC
Deadline
Fees as CTEC lists them for the 2026/2027 cycle: $33 registration plus $2 processing on renewal, $55 late fee November 1 to January 15, $100 application plus $2 processing and $35 registration for a new preparer. Exemptions from BPC 22258. The bond premium and Live Scan operator fees are paid to third parties and are not included. Not a determination by CTEC or FTB.
Registering for the first time
CTEC’s new-application page lays the process out in two halves: the application, which ends with the background approval, and the registration, which ends with payment.
| Step | What it involves | Time and cost |
|---|---|---|
| 1. Online application | Personal information, a background questionnaire, a login account. The application is tied to the current cycle and rolls into the next one on November 1 if not completed. | $100 nonrefundable application fee plus $2 processing. Valid three years. |
| 2. Live Scan | Download the Live Scan request form from the application page after paying the fee, take it to a Live Scan operator, who sends the prints to the Department of Justice. All offenses must be reported, including those dismissed, expunged or older than ten years. Out of state: FD-258 ink cards mailed to the DOJ with a $32 check. | Operator fee paid locally. CTEC’s legal review takes two to eight weeks after the DOJ report arrives. Results valid three years. |
| 3. 60-hour qualifying education | 45 hours federal, 15 hours California, from a CTEC-approved provider, which reports completion to CTEC. May be started before the application, at the risk of paying for a course you cannot use if the background check fails. | Provider’s price. Must be completed within the 18 months before registration (BPC 22255(a)). |
| 4. PTIN | The IRS preparer tax identification number, applied for at irs.gov. | IRS fee. |
| 5. $5,000 surety bond | From a surety admitted in California; uploaded to the CTEC account. The upload is accepted only once the Live Scan is approved and the education reported. | Premium set by the surety; see the bond section. |
| 6. Registration and payment | Once steps 2 to 5 are complete, a “Click Here to Register Now” button appears in the account. | $35 annual registration fee. The certificate is mailed within four to six weeks; a receipt can be printed at once. |
Two timing details from CTEC’s own FAQ. A preparer who finishes the requirements late in the cycle may wait until after November 1 to make the final registration payment and be registered for the following cycle, with no renewal due until October 31 of the next year; paying before October 31 registers you for the current cycle and the renewal falls due within weeks. And experience can substitute for the course: under BPC 22255(c) a person with at least two recent years of paid personal income tax preparation may petition CTEC to treat it as equivalent to the 60 hours, so long as the experience was gained lawfully.
The annual renewal: 20 hours, the bond, the PTIN, the fee
Registration expires every year on October 31 and renewal opens August 1. CTEC’s September 2026 notice for the 2026/2027 cycle lists four requirements.
| Requirement | Detail |
|---|---|
| 20 hours of continuing education | 10 hours federal tax law, 3 hours federal tax law updates, 2 hours ethics, 5 hours California tax law, from a CTEC-approved provider. The provider reports the hours to CTEC electronically; the preparer gives the provider the CTEC ID and the PTIN. Hours for the next cycle count from November 1, provided they were not used for the current one. BPC 22255(b) sets the statutory floor at 15 federal and 5 California. |
| Current PTIN | Renewed with the IRS before the CTEC renewal. CTEC does not report to the IRS; the IRS checks the CTEC register when it decides whether a preparer is exempt from the six-hour Annual Federal Tax Refresher course under the Annual Filing Season Program. A CRTP who completes the 20 hours and renews by October 31 is treated as exempt; a late renewal can leave the PTIN account showing missing AFSP credits until the IRS updates it. |
| Current bond | The $5,000 bond with the surety’s name, bond number and expiration date, and any claims paid against it. A new bond can be uploaded only when its effective date is in the past or within the next ten days. |
| Renewal application and fee | $33 registration plus a $2 processing fee, paid by Visa or Mastercard in the CTEC account. Completing the education does not renew the registration; the preparer completes the renewal. |
The reported-hours problem is the one CTEC answers most often. If the hours do not appear in your account, the provider either lacks your correct CTEC ID or has not yet reported; CTEC’s policy gives providers a reporting deadline, after which you send CTEC the certificates and it works with the provider. Order the courses early enough that a reporting delay in October does not cost you the deadline.
The $5,000 bond
Section 22250.1 requires every tax preparer to maintain a bond of $5,000, issued by a surety admitted in California, for each individual preparing returns for others. The bond is in favor of the people of the State of California and for the benefit of anyone damaged by the preparer’s fraud, dishonesty, misstatement, misrepresentation, deceit or unlawful acts or omissions. It does not cover civil penalties, fines or attorney fees, and the surety’s aggregate liability for any one preparer is $5,000 regardless of the number of claims or years in force.
The details that matter to a firm owner are these. A preparer who employs other preparers files a bond that identifies each of them, and each is covered by the employer’s bond, up to a total of $125,000 for the firm; an amendment is filed within 30 days of any change in the preparers covered. No deposit in lieu of a bond is allowed. The surety must give the preparer and CTEC 30 days’ written notice before cancelling, and a preparer whose bond lapses must stop preparing until a new one is in force. Since July 2019 a preparer must report any paid claim to CTEC, which posts it. The bond, with its number, is also one of the three items that section 22252 requires you to give each client in writing before you begin work, with your name, address and telephone number and the address of CTEC’s website.
The price is small. CTEC does not sell bonds and does not publish premiums; commercial sureties quoted the $5,000 California tax preparer bond at $20 to $27.50 for a one-year term and about $50 for three years on October 20, 2026. Buy the longest term that matches how long you intend to practice, because the renewal asks for a current bond every year and a lapsed one stops you working.
Missed October 31, missed January 15
| Date | Status | What it takes | Cost to CTEC |
|---|---|---|---|
| August 1 to October 31 | Renewal window | 20 hours reported, bond and PTIN current, renewal submitted | $35 |
| November 1 to January 15 | Inactive. CTEC’s guidance: stop paid preparation until renewed | Same requirements, plus the late fee | $90 ($33 + $55 + $2) |
| After January 15 | Expired. The registration is gone | New application: $102, Live Scan, the 60-hour course again, PTIN, bond, $35 registration. Continuing education taken before the new 60 hours does not count | $137 plus the course and the Live Scan |
CTEC’s November 2025 guidance for preparers who miss October 31 is blunt: the registration is inactive, preparing for a fee while inactive is illegal, and the late window is the only way back without starting over. For a practice owner the practical consequence is a season problem. A preparer who is inactive on January 15 has no registration for the filing season that opens two weeks later, and an employer who lets that preparer sign returns has a second problem under section 22258(b)(3), which allows an employee to sign only if exempt or registered.
The four duties the Act adds to every paid return
Registration is the visible requirement. The Act also sets conduct rules that apply to every registered preparer and that FTB and CTEC enforce.
- Written disclosure before any work (BPC 22252). Before rendering tax preparation services, give the client in writing your name, address and telephone number, evidence of compliance with the bonding requirement including the bond number, and the address of CTEC’s website. An engagement letter that carries these three items satisfies it.
- Confidentiality (BPC 22252.1). No confidential client information may be disclosed without the client’s written permission, with the same exceptions the CPA statute carries, including disclosure to another preparer in connection with a proposed sale or merger of the practice. Disclosure outside the United States needs the client’s written permission after written notice.
- Copies and signatures (BPC 22253(a)(5) and (9)). Keep a copy of every return prepared for four years from the completion date or the due date, whichever is later. Sign the return once you have been paid. A business label over the signature block is not a signature; the return must carry the individual preparer’s name and PTIN.
- Federal 7216 (BPC 22253(a)(8)). A violation of IRC 7216, the federal rule on disclosure and use of tax return information, is a violation of the California Act as well, so a CTEC preparer answers to both.
Enforcement runs through two bodies. Since SB 1543 in 2005 the Franchise Tax Board identifies unregistered preparers and issues the penalty notices: $2,500 for the first failure to register, waived if proof of a valid credential reaches FTB within 90 days of the notice, and $5,000 for each subsequent failure; CTEC says enforcement cut unregistered preparers from an estimated 10,000 to 20,000 in 2005 to fewer than 4,000 a year now, against roughly 40,000 registered. CTEC itself, since SB 484 in 2014, can deny, suspend for up to a year, revoke or place on probation a registration for any of the eighteen grounds in section 22253, and it notifies FTB and the IRS of suspensions and revocations. The Attorney General or a district or city attorney may fine up to $5,000 per violation and issue a cease-and-desist order. A violation of the Act is also a misdemeanor under section 22256, and any person may sue a preparer who fails a duty under the Act for a $1,000 civil penalty plus attorney fees under section 22257.
Where CTEC meets a sale
Registered tax practices are bought and sold in California every year; five of the nineteen California listings on one national brokerage site on October 20, 2026 were EA or tax-only practices, and some of those are run by registered preparers. A buyer, whether a CPA firm or a roll-up, runs a short compliance check on a CTEC practice before pricing it, and an owner a year or two from a sale can run it first.
- Every preparer’s registration is current in CTEC’s public register, which a buyer can search by name, and every return in the file carries an individual preparer’s signature and PTIN rather than a label.
- The bond file is clean: a current bond for each preparer or an employer bond naming all of them, no paid claims posted by CTEC, and amendments filed within 30 days of staff changes.
- The 22252 disclosure is in the engagement letter for every client, and copies of returns are kept for four years.
- The seller’s exemption after the sale is settled. A registered preparer who sells to a CPA firm and stays through the transition can keep preparing as an employee whose returns the firm’s licensee reviews and signs, or keep the registration and sign. A buyer will want that decided before closing, because it determines who signs the season’s returns.
- Client information moves under the right agreement. Section 22252.1(a)(4) permits disclosure to another preparer in connection with a proposed sale, and Treasury Regulation 301.7216-2(n) permits the client list to be reviewed in diligence and transferred with the sale only under a written agreement that keeps the information confidential and limits its use to the purchase. The sequence is in selling a CPA practice in California confidentially; the pricing of a tax practice is in how much CPA firms sell for.
One date to carry in the back of the file: the Act sunsets January 1, 2028 under section 22259 and is reviewed by the Legislature’s policy committees before then. It has been extended at each prior review. A practice sold in 2027 with a registered preparer staying on should have the transition drafted so that it works whichever way the extension lands.
Sources
- CTEC, Tax Preparers: the CRTP requirements, the renewal and late-renewal dates, the $35 and $102 fees in the FAQ, continuing education timing, the AFSP exemption, bond upload rule, exempt categories; page updated October 7, 2026, read October 20, 2026.
- CTEC, CRTP Renewal Requirements (September 3, 2026): the 2026/2027 cycle, the 20-hour breakdown, the $33 fee plus $2 processing, the January 15 final deadline.
- CTEC, Missed the CTEC Renewal Deadline? (November 20, 2025): inactive status, the instruction to stop paid preparation, the $55 late fee, what happens after January 15.
- CTEC, New Application (updated August 27, 2026): the two-part process, Live Scan, out-of-state FD-258 cards and the $32 DOJ fee, the three-year and 18-month validity periods, the $100 plus $2 and $35 fees.
- CTEC, Legislative Authority: the text of Business and Professions Code 22250 to 22259 as amended by SB 788 (Chapter 329, Statutes of 2025), including 22250.1 (bond), 22251 (definitions), 22252 (disclosure), 22252.1 (confidentiality), 22253 (violations), 22253.2 (FTB and the $5,000 fine), 22255 (education), 22256 to 22257 (misdemeanor and civil penalty), 22258 (exemptions) and 22259 (sunset).
- CTEC, Enforcement (updated September 9, 2026): SB 1543, the $2,500 and $5,000 FTB penalties and the 90-day waiver, SB 737, SB 484, registrant counts.
- SuretyBonds.com and NNA Surety: published premiums for the $5,000 California tax preparer bond, read October 20, 2026. Treasury Regulation 301.7216-2(n) on the transfer of a client list with the sale of a tax preparation business.
This article is general information for California tax practice owners and is not legal advice or a determination by CTEC, the Franchise Tax Board or the California Board of Accountancy. Fees, hours and dates are as CTEC published them on the dates shown; confirm your own status in your CTEC account before the deadline.
Denis is a practicing tax and accounting professional and the principal of VistaTax, a California practice serving individuals and closely held businesses: individual and business tax preparation, tax planning, bookkeeping, financial reporting and payroll. As WIN’s founding CPA he anchors the licensed side of the structure and sits at the table for every transition. More about WIN’s team.