Once you become a licensed CPA and have entered the working world, your CPA journey is far from over. Each cycle, you will need to meet a number of requirements to maintain your license. The two main steps involves registering your license (also known as a certificate in some states) and paying the renewal fee, as well as fulfilling a certain continued professional education (CPE) requirements. However, these two do not always follow the same cycle.
CPA Renewal Cycles
Renewal and reporting cycles can operate either annually (every year), biennially (every two years) or triennially (every three years.) Some states will have a renewal cycle that matches the CPE reporting cycle, while others may have a mixed approach such as an annual license renewal requirement with a triennial CPE reporting cycle. To further complicate things, even the dates of the two cycles may be different, and the CPE reporting cycle might also entail report at least 20 of the overall CPE hours per year. Some states send reminders while others do not. So too, some states will only charge a fine for license reinstatement of an expired license, while others will require a disciplinary hearing or criminal background check. All of these factors vary from state to state, which can get pretty complicated. That is why we have compiled a detailed overview of each state’s requirement for you.
CPE Reporting Cycles for CPAs
To expand a little on the above, each state varies slightly in the following regards:
- CPE reporting period
- Number of CPE hours required
- Specific CPE courses required
- Hours of specific courses allowed or required
- Annual renewal date
When it comes to the number of hours required, let’s look at the following example: Alabama requires 40 hours of CPE while Florida requires 80 hours of CPE. Wisconsin, on the other hand, doesn’t require any CPE at all. Exactly how this works has been explained in detail in this article. We have also specified the CPE requirements for each state on their own dedicated page.
Examples of state renewal requirements
To illustrate how mixed reporting cycles would work, we will provide the following examples:
- The Michigan State Board of Accountancy requires their CPA license holders to renew their licenses Biennially by July 31st. However, they are required to report 40 CPE hours per year.
- Minnesota, on the other hand, requires license holders to renew their license annually by December 31st, while their CPE needs to be accrued on a triennial cycle. Their overall CPE requirement is 120 CPE hours, with a minimum reporting requirement of 20 CPE per year. They also have
Maintaining an inactive CPA license
Most states and jurisdictions allow the option to switch their license status to ‘inactive.’ This allows the license holder to maintain their CPA license without the need to fulfill CPE requirements or to pay the full renewal fee This is a useful option for applicants who plan on practicing private accounting, to take a break from practicing accountancy altogether or those who plan to practice in another. However, as always there are exceptions to this, as there are states that do not allow for this option and others that do stipulate reduced CPE requirements. Reactivating an inactive license will usually entail the equivalent fulfillment of 40 CPE per year year of being registered as an inactive license holder for up to 120 CPE. This includes any ethics requirements that renewal usually entails, as well as a reactivation fee and active license fee.
How much does it cost to maintain a CPA license?
There are four main costs associated with maintaining a CPA license. These are the renewal fee, CPE course fees, late fees and status changing fees. The last two are only applicable in cases where license holders are late renewing their license fees or submitting their CPE report sheet or where license holders are reverting their status back from either inactive to active or from lapsed/expired to active.
Renewal fees vary from state to state and can be anywhere from $50.00 to $300.00. It usually costs less where the license is renewed annually versus where it is renewed triennially. For instance, in Alabama CPA license holders are required to renew their licenses annually by September 3th for a fee of $75.00. Colorado, on the other hand, has a biennial renewal cycle and a fee of $165.00.
This is a trickier topic to account for, as it really depends on how you accrue your Continued Professional Education (CPE). For instance, lecturing will likely earn you money and so might articles, but they will both cost you the investment of time. State-sponsored ethics courses are usually free, but other ethics courses will usually cost something. Accredited college courses, both classroom and online courses, will cost you hundreds of dollars, and even register classes such as those offered by AICPA and NASBA tend to cost $50.00+ for four-hour CPE courses. However, accounting firms will often hold conferences and lectures for their employees which can count towards their CPE, or even sponsor them to attend conferences elsewhere.