Registered tax preparers California Tax Education Council (CTEC)

California law requires anyone who, for a fee or for other consideration, assists with or prepares tax returns for another person or who assumes final responsibility for completed work on a return and is not an exempt preparer to register as a tax preparer with the California Tax Education Council (CTEC). The California State Legislature created the CTEC to promote competent tax preparation within the state.

Who is required to register with CTEC?

Any non-exempt tax preparer in California who, for a fee or for other consideration:

• Assists with or prepares state or federal income tax returns
• Assumes final responsibility for such returns
• Offers these services

Exempt preparers not required to register with CTEC are:

• California Certified Public Accountants (CPAs)
• Enrolled agents (EAs)
• Attorneys who are members of the California State Bar
• Specified banking or trust officials

How to become a registered tax preparer

To become a CTEC registered tax preparer, you must:

• Take a 60-hour qualifying education course from a CTEC approved provider within the past 18 months
• Purchase a $5,000 tax preparer bond from an insurance/surety agent
• Get a Preparer Tax Identification Number (PTIN) from the IRS
• Approved Lives Scan
• Pay the $100 nonrefundable application fee plus a $2 processing fee in order to submit a new application.
• Pay the $33 registration fee plus a $2 processing fee online

Annual renewal

You must renew your registration with CTEC annually to legally prepare income tax returns. Visit CTEC for more information.

To renew your CTEC registration, you must:

• Take a minimum of 20 hours continuing education from a CTEC approved provider, which must include:
  • 10 hours of federal tax law
  • 3 hours of federal tax update
  • 2 hours of Ethics and
  • 5 hours of California tax law
• Renew your PTIN number with the IRS each year
• Maintain a $5,000 tax preparer bond
• Renew your registration and pay the $33 annual registration fee plus a $2 processing fee before October 31 of each year
  • November 1 - January 15 a late fee of $55 will be assessed.

CTEC registration guidelines

If you:	And you:	Does the state of California require CTEC registration?
Are an inactive CPA or are a non-California CPA	Prepare income tax returns for a fee in California	Yes, or you must resume/become an active California CPA
Work for an exempt tax preparer	Sign the income tax return	Yes
	Do not sign the income tax return (exempt tax preparer is the responsible party)	No
Work for a CTEC registered tax preparer	Take income tax data from a client and enter it into a computer (whether in person or other contact)	Yes
	Have no contact with clients and perform the clerical function of inputting tax information into the computer for your employer	No
Are a nonexempt tax preparer	Take income tax data from a client and enter it into a computer and/or prepare the income tax return	Yes
Are a nonexempt tax preparer who prepares income tax returns that are bundled or included with other services	Receive a fee for the bundle of services which include the preparation of the income tax return	Yes
Are an employee of a business unrelated to income tax return preparation	Prepare (or assist with preparation of) the company’s business income tax return	No
	Compile the company’s business income tax information for submission to a paid tax preparer who will prepare the income tax return	No

Unregistered tax preparer penalty

FTB has the authority to penalize tax preparers not registered with CTEC per R&TC § 19167(d).

Penalties are as follows:

• $2,500 for the first failure to register
• $5,000 for each subsequent failure to register

You have 90 days to comply after receiving notification of the $2,500 penality issued for your first failure to register with CTEC or not having a valid credential. The penalty will be waived if you provide proof of compliance within 90 days.

Report fraudulent tax preparers to the appropriate agency.