CPA reciprocity is important because CPA license requirements and qualifications are established be State Boards of Accountancy. This localized government is good because it gives Certified Public Accountants in each state more influence on how the licensing process works.
It also means that every state’s licensing requirements are slightly different. Just because you met the requirements in one state doesn’t mean you will meet the requirements in another. Thus, there are over 50 different sets of rules to follow.
So, how can a certified public accountant practice across state lines? Do they have to undergo extensive licensing processes in every state?
No, CPA reciprocity among states allows accountants to move between state and practice without having to obtain multiple licenses.
Let’s take a look at the requirements for a reciprocal CPA license, so you can use your CPA license in any state you want to practice.
What is CPA License Reciprocity?
CPA license reciprocity is an agreement among US states and jurisdictions that each state will honor another state’s CPA license. This allows licensed CPAs from one state to practice in another state without having to meet all of the licensing requirements of the latter.
This agreement streamlines the process for CPAs to expand their practice in multiple states. This is particularly important for Certified Public Accountants practicing in smaller states with close boarder like the New England states of New York, New Jersey, and Connecticut.
For example, a CPA in New York might have many clients in New Jersey, so it might make sense to set up an office across the river.
Interstate CPA License Reciprocity
Interstate CPA license reciprocity, sometimes called CPA mobility, is an agreement between states to accept other states’ CPA licenses instead of requiring accountants to obtain a local license.
This concept is similar to a driver’s license. You can drive across state lines with the same driver’s license because states have universal license reciprocity.
Like a driver’s license, interstate CPA reciprocity laws allow certified public accountants to practice in states other than on the one they are licensed in without the need to undergo the full licensing process in each jurisdiction.
How to Transfer a CPA License to another State
To qualify for interstate CPA license reciprocity, you must be an active CPA license holder in good standing in your home state and meet certain eligibility criteria like having a clean disciplinary record and fulfilling specific educational requirements.
The application process typically involves submitting documentation, such as proof of licensure, educational transcripts, and work experience verification, along with any necessary fees.
Once an application for reciprocity is submitted, the state board of accountancy in the receiving state reviews the documents and verifies that you meet their specific reciprocity requirements.
If approved, you are granted the ability to practice public accounting in the new state.
International License Reciprocity
International CPA license reciprocity is a legal agreement between two or more countries that each country will recognize the certified public accountants’ qualifications of the other countries. It allows CPAs to practice their profession in foreign jurisdictions without the need to complete an entirely new licensing process. This is particularly valuable in today’s globalized business environment where companies often operate internationally.
How to Transfer a CPA License to another Country
To qualify for international CPA license reciprocity, you typically have to meet the host country’s requirements for accounting principles and standards proficiency.
This may involve passing equivalency exams or providing evidence of extensive experience in accounting practices.
The application process for international reciprocity can be complex depending on the country your are applying to. Most countries require you to submit educational transcripts, proof of licensure, and work experience verification.
Additionally, candidates may be required to pay application and examination fees in order to have their application processed.
Once granted reciprocity, CPAs can legally practice accounting in the host country. Keep in mind, that just because you were granted reciprocity, it doesn’t mean you don’t have to maintain your new license. You may be required to do extra continuing education to keep your CPA reciprocity current.
Reciprocal CPA License Requirements
Interstate CPA license reciprocity simplifies the process of expanding your CPA license or practice geographically, but it doesn’t mean you won’t have to complete additional licensing requirements.
It’s important to be aware of the specific requirements of each state and country you intend to practice in because they can vary.
Most states require CPA license holders to complete the following requirements:
- Bachelor’s Degree
- 150 college credit hours
- Pass the CPA exam
- Ethics exam
- Work experience
Chances are if you already have your CPA license in one state, you meet all of these requirements.
7 Steps on How to get Reciprocal CPA License
Although getting your CPA license reciprocity is fairly easy, you will have to complete the application process.
Here are the 7 steps to complete your reciprocal CPA license application.
1. Eligibility Criteria
Each state has specific eligibility criteria for reciprocity. Typically, a CPA must hold an active license in their home state, meet certain educational requirements, and be in good standing. Check that you meet the requirements.
2. Application Process
Submission of Documents: you typically have to submit the following documents in your application process proof of licensure in your home state, educational transcripts, and verification of work experience.
Application Fees: States may charge application fees for processing reciprocity requests.
3. Review and Approval
State boards of accountancy review the application and ensure that the candidate meets their specific criteria for reciprocity.
4. Conditional Licenses
In some cases, states may grant conditional licenses to CPAs who meet most reciprocity requirements but have minor deficiencies like inadequate educational credits. These conditional licenses may require the CPA to fulfill additional requirements within a specified timeframe.
5. Pay Licensing Fees
Once your application is approved, you will likely need to pay licensing fees to obtain your reciprocal CPA license.
6. Comply with Continuing Education Requirements
Make sure to maintain your continuing education obligations mandated by the new jurisdiction in order to keep your license current.
7. Begin Practice in the New State
It’s official. You are licensed. Now you can practice in the new state.
CPA Reciprocity by State
Most states allow some form of CPA license reciprocity with the vast majority allowing CPAs to practice across state lines. Only about half of the states allow international CPA reciprocity, however.
Here is a table that shows which states honor interstate and international reciprocal CPA licenses.
| State License | Interstate Reciprocity | International Reciprocity | Cost & Fees |
|---|---|---|---|
| Alabama | Yes | Yes | $100 |
| Alaska | Yes | No | $500 |
| Arizona | Yes | Yes | $100 |
| Arkansas | Yes | Partial | $195 |
| California | Yes | Yes | $350 |
| CNMI | Yes | Yes | $355 |
| Colorado | Yes | Yes | $185 |
| Connecticut | Yes | Partial | $300 |
| Delaware | Yes | No | $160 |
| District of Columbia | Yes | Yes | $175 |
| Florida | Yes | Partial | $250 |
| Georgia | Yes | Yes | $220 |
| Guam | Yes | No | $200 |
| Hawaii | No | No | n/a |
| Idaho | Yes | Yes | $295 |
| Illinois | Yes | Yes | $120 |
| Indiana | Yes | Yes | $160 |
| Iowa | Yes | Partial | $100 |
| Kansas | Yes | Partial | $250 |
| Kentucky | Yes | Yes | $100 |
| Louisiana | Yes | Yes | $120 |
| Maine | Yes | Yes | $420 |
| Maryland | Yes | Partial | $89 |
| Massachusetts | Partial | Yes | $499 |
| Michigan | Yes | Yes | $300 |
| Minnesota | Yes | Yes | $150 |
| Mississippi | Yes | No | $210 |
| Missouri | Yes | Yes | $165 |
| Montana | Yes | Yes | $200 |
| Nebraska | Yes | Partial | $285 |
| Nevada | Yes | Yes | $240 |
| New Hampshire | No | Partial | $435 |
| New Jersey | Yes | Yes | $75 |
| New Mexico | Yes | Partial | $175 |
| New York | Yes | Yes | $427 |
| North Carolina | Yes | Yes | $100 |
| North Dakota | Yes | No | $140 |
| Ohio | Yes | Yes | $180 |
| Oklahoma | Yes | Yes | $350 |
| Oregon | Yes | Partial | $225 |
| Pennsylvania | Yes | Partial | $65 |
| Puerto Rico | Yes | No | $145 |
| Rhode Island | Yes | Yes | $375 |
| South Carolina | Yes | No | $150 |
| South Dakota | Yes | Partial | $150 |
| Tennessee | Yes | Yes | $200 |
| Texas | Yes | Yes | $100 |
| Utah | Yes | Yes | $85 |
| Vermont | Yes | Yes | $100 |
| Virgin Islands | Yes | Yes | $150 |
| Virginia | Yes | Yes | $75 |
| Washington | Yes | Yes | $150 |
| West Virginia | Yes | Partial | $200 |
| Wisconsin | Yes | Yes | $118 |
| Wyoming | Yes | Yes | $110 |
How much does a Reciprocal CPA License Cost?
On average a reciprocal CPA license cost approximately $500. However, the cost associated with obtaining another CPA license can vary widely depending on the state or jurisdiction in which you are seeking licensure.
Here are the main reciprocal CPA license cost and fees:
- Application Fees
- Examination Fees
- Transcript Evaluation Fees
- License Issuance Fee
- Continuing Education Costs
One fee that might not be readily apparent is association memberships. Some states require CPAs to join a professional accounting organization or state CPA societies in order to get a licnese. Membership fees can contribute to the overall cost.
It’s important to research and budget for these potential expenses before applying for reciprocal CPA licensure. Each state may have its own fee structure, so candidates should consult the specific guidelines provided by the state board of accountancy where they intend to practice.
When should you apply for a Reciprocal CPA License?
Applying for a reciprocal CPA license is a strategic career decision that depends on a few different factors. Depending on your goals and career status, you might want to pursue a license in another state.
Here are some considerations to help determine when to apply for reciprocity:
Meeting Eligibility Criteria- Make sure you meet the eligibility requirements for the state you are applying. This may include holding an active and unrestricted CPA license in your home state in good standing and fulfilling educational and experience requirements.
Immediate Need for Practice- If you are applying for a job in another state, you may want to start the reciprocal license application process right away.
Long-Term Career Goals- If you see a permanent or extended period of practice in a new state, it makes sense to pursue reciprocal licensure early on.
Additional Examination Requirements- Some states may require reciprocity candidates to pass additional exams. Look at the exam requirements before you get too far into the application process.
Timing of the Application Process- The application process for reciprocal licensure can take several weeks to a few months depending on the state, so start your application well in advance of when you intend to begin practice in the new jurisdiction.
Consideration of Peak Work Seasons- If you work in a sector with seasonal demands, like tax preparation, applying for a reciprocal license ahead of the busy season makes sense. This way you will be fully licensed to work with clients come the busy season.
Financial Considerations- Budget for application fees, examination costs (if applicable), and any other expenses associated with the reciprocity process.
Ultimately, the decision of when to apply for a reciprocal CPA license should align with your career goals. If you want to move to a new start or start a new practice in another state, you should apply now. Research the process to see when the optimal time is for you to pursue a reciprocal licensure.
Considerations before Applying for Multi-state CPA License Reciprocity
There are numerous reasons why you would want to apply for a multi-state license, but there are also some things to look out for. Here are a few considerations you should make before you apply for your multi-state license.
Varying State Requirements
Although reciprocity simplifies the process, each state may have unique requirements. These can include specific educational criteria, continuing education mandates, or additional exams. CPAs must be aware of these variations and ensure they comply with the specific requirements of the state they intend to practice in.
Continuing Professional Education (CPE)
Many states have CPE requirements that CPAs must fulfill to maintain their licenses. These requirements typically vary from state to state, but you have to maintain your CPE credit hours in the state where you want to hold reciprocity.
Maintaining Multiple License Renewals
If you have multiple CPA licenses in several states, you may need to renew licenses in each jurisdiction. This can be a handful. It requires staying up-to-date with the renewal process and compliance requirements of each state.
CPA Practice Privilege
CPA practice privilege is an alternative to license reciprocity where you don’t need to submit an application or obtain an additional license to practice in another state. Instead, you apply for a permit to practice in the new state.
This privilege is granted temporarily under specific conditions, typically requiring a CPA to register with the host state and adhere to its professional standards.
Practice privilege is usually meant to be a short-term permit to practice in a state. If a Certified public accountant wants to practice in that state long-term, he or she will need to apply for a reciprocal license.
FAQ
Can CPAs work in multiple states?
Yes, CPAs can work in multiple states. The concept of CPA practice privilege allows them to practice in states where they are not licensed given that they meet certain criteria and register with the host state.’
Does New York have CPA reciprocity?
Yes, New York offers CPA reciprocity, allowing Certified public accountants licensed in other states to practice in New York without having to fulfill all the licensing requirements. However, New York requires CPA applicants to meet specific eligibility criteria before they can complete the necessary paperwork to obtain a reciprocal license.
Can a NY CPA practice in NJ?
Yes, a CPA licensed in New York can practice in New Jersey under the provision of CPA practice privilege. This allows New York CPAs the ability to offer their services in New Jersey without obtaining an additional licenses if they meet the NJ registration and professional standards.
What is the easiest state to get a CPA license in?
The easiest states to get a CPA license are Alaska, Montana, and Wisconsin. All of these states do not have citizenship, resident, or social security requirements nor do they require the 150-credit hour rule.
What states have CPA firm mobility?
All 55 U.S. jurisdictions (50 states, Washington D.C., Puerto Rico, U.S. Virgin Islands, Guam, and the Commonwealth of Northern Mariana Islands) have adopted some form of CPA firm mobility. This allows CPA firms to provide services in other states without obtaining an additional license.
Can you hold a CPA license in multiple states?
Yes, Certified Public Accountants can be licensed in multiple states at one time as most states honor reciprocity laws. CPAs simply need to fill out CPA reciprocal license applications for each state they want to be licensed in.
