Expanded horizons: Using your CPA license across state lines
What accounting students need to know if they end up serving clients in other states.
What happens if you are licensed as a CPA in one state and want to work with clients in another state? Or if you move to a new state after getting your license in another one?
The good news is that expanding your horizons across state lines can be pretty simple. However, it’s useful for students to understand how the laws and regulations on licensing work and what they will need to know to practice.
Each state sets its own regulations for licensed professionals, which means that the rules for CPAs may vary from state to state. In most cases, keeping track of and meeting various expectations for CPAs isn’t complicated. The AICPA works to ensure CPAs have the best chance to take advantage of all the professional opportunities available to them around the country, according to Marta Zaniewski, AICPA vice president of state regulatory and legislative affairs.
That has included advocating — along with state CPA societies — for states passing versions of the Uniform Accountancy Act (UAA), a model licensing law that provides a consistent approach to regulation of the accounting profession. It has been adopted in some form by all 50 states and five U.S. licensing jurisdictions (the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of Northern Mariana Islands). They are considered to have “substantially equivalent” CPA licensing requirements that allow reciprocity and mobility between states that will allow CPAs to work across state lines.
Reciprocity between jurisdictions allows individual licensed CPAs to get a reciprocal license in another state if they move there.
Mobility allows CPA who are licensed in one state to offer services to clients in another state. CPAs may have to register in other states depending on the services they offer there, usually in the case of attest services.
“Many CPAs travel to meet or work with their clients, which can involve crossing state lines, so the profession has put a lot of thought and effort into ensuring they can do so without having to be licensed in multiple jurisdictions,” Zaniewski said.
As a result, in the simplest sense, a CPA license is like a driver’s license: You obtain one in the state where you live and pay taxes, and you can use it in other states. Note that in seven states, professionals are able to obtain a CPA certificate after passing the CPA Exam, but they aren’t considered licensed until they meet other conditions, such as requirements that call for professionals to have a certain amount of experience before they are licensed. Those states are Alabama, Connecticut, Hawaii, Illinois, Kansas, Nebraska, and Oklahoma. CPAs who receive certificates but are not licensed in those states would not be eligible to practice in other states until they are fully licensed.
If you’re uncertain about how reciprocity and mobility apply in your situation, it’s a good idea to check with the firm you’ll be working with and the board of accountancy in the state in which you plan to work or offer services.
“CPA firms play a large role in helping address reciprocity issues for members of the firm,” Zaniewski said. “However, individual licensees should also be aware of any potential reciprocity issues.”
As an example, if you are going to work in another state, find out if you must comply with the continuing professional education requirements there. The AICPA and National Association of State Boards of Accountancy site cpamobility.org is a good resource for more information.
The existing regulations should allow most CPAs to serve clients in another state, but you should check the rules if you are planning to relocate. For example, “if you permanently move to another state and begin practicing there, you should seek licensure there by checking with that state’s board of accountancy to be sure you meet all the necessary requirements to work there,” Zaniewski advised.
That’s also true if you are going to be working remotely for a firm located in another state.
A career without (state) limits
The CPA profession offers many options and opportunities to students, Zaniewski said. But it’s a good idea to do some research on the criteria you will have to meet to become a CPA in terms of education, experience, and examination — and license regulations that may apply to where and how you want to work.
The licensure section on ThisWaytoCPA.com features information on what you need to know as you move along your path to becoming a CPA. In addition, state CPA societies can be a great resource for students throughout their careers, Zaniewski said, including when it comes to learning more about reciprocity issues in the state or states in which they work.
— Anita Dennis is a New Jersey-based freelance writer. To comment on this article or to suggest an idea for another article, contact Chris Baysden, a JofA associate director.