If you live in California and you’re interested in kickstarting a career in tax services, you must become familiar with the California Tax Education Council (CTEC). Built to protect taxpayers, it’s a requirement of anyone preparing tax returns in the state. Learn all about CTEC California, how to register, and the best move for building your tax career.
Summary
To legally provide paid tax preparation services in California, non-exempt individuals—those without an Enrolled Agent designation or CPA license—must register with the California Tax Education Council (CTEC) as CTEC Registered Tax Preparers (CRTPs).
What Is CTEC?
CTEC stands for the California Tax Education Council and is a state-mandated nonprofit organization that regulates tax preparation services in California. It was created by California law to protect taxpayers and ensure that tax preparers are properly educated to provide these services with competency and ethical standards. Individuals who register with CTEC become CRTPs (CTEC Registered Tax Preparers).
What Can You Do As a CRTP in California?
With a CRTP credential, you are legally allowed to charge for federal and California income tax return preparation services. You can assist with preparing and even sign these tax returns, including individual, partnership, and corporation returns. CRTPs also gain career opportunities by earning their registration.
You can:
- Apply for entry-level roles in tax preparation firms
- Work in bookkeeping or accounting supportive roles
- Start a tax preparation business for California-based practice
- Build foundational knowledge and work experience earn additional credentials
It is important to note, however, that as CRTP you are only authorized to offer tax services within California.
Who Needs to Register with CTEC in California?
You must get CETC certified if you are paid for preparing or assisting with tax returns in California, and you’re not otherwise licensed with a qualifying credential. This rule applies even if you only prepare federal returns or input tax data into software for a fee.
Some professionals are exempt from becoming CTEC certified, however. You do not need to register if you are:
- A licensed Certified Public Accountant (CPA)
- An Enrolled Agent (EA)
- An Attorney of the State Bar of California
These professionals are exempt because they are already regulated by their respective governing boards and meet higher credentialling standards.
How to Register with CTEC in California?
Registering through CTEC California requires that you complete a 60-hour course from a CTEC-approved provider, within a maximum 18 months, where you’ll cover tax concepts related to federal and California tax laws, and ethics as a tax professional.
You must also apply for and receive a Preparer Tax Identification Number (PTIN) from the IRS, purchase a minimum $5,000 surety bond, complete a background check, and apply online through CTEC California.
As a registered professional, you must also maintain your credential in good standing by completing 20 hours of continuing education and renewing your registration each year.
CTEC Certified vs Enrolled Agent
While gaining certification through CTEC California and becoming an Enrolled Agent (EA) are both technically tax credentials, they mean very different things for your career.
Enrolled Agent is the highest-level tax designation granted by the IRS. EAs have the nationwide authority to represent their clients in any tax matter—including preparing and filing returns, representing clients in an audit, and advocating on their behalf to the IRS. To become an EA, you must pass the three-part EA Exam, which ensures that you have the skillsets to handle complex tax issues, audits, and appeals for individuals and businesses alike. In other words, EAs have limitless tax representation rights in both scope of service and geography (within the US).
By comparison, becoming CTEC certified in California grants you limited client representation. It’s best for professionals who are eager to get started in tax preparation and are working exclusively within California on basic tax prep compliance and returns. Through CTEC California, you cannot take on clients out of state, nor can you engage in higher-complexity services like audits and appeals, and therefore will face restrictions as you grow your tax career.
Learn More About Becoming an EA
If you’re eager to get started preparing and filing tax returns in California, CTEC may be a great starting point. However, to grow a long-term career in tax services nationwide, consider earning your EA credential.
Learn more about what an EA does, who can become one, and passing the IRS’s EA Exam, in Becker’s free EA Exam Guide. Take the first steps toward going further in your tax career!
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