The CPA Reciprocity Agreement Between the States of the United States

There is a lot of confusion regarding CPA Reciprocity, so I’ve spent some time in this article clarifying any confusion and explaining what CPA reciprocity really means, who it applies to and how you can take advantage of it.

Many people think that just because you have a CPA license, you can just go to any State in the United States and practice as a CPA. Not true at all. It is also not true that you can qualify under a reciprocity agreement in any State.

Each State has different CPA requirements to become a CPA, and thus their reciprocity rules are also different.

This is a problem particularly for those practicing public accounting when they have clients in multiple States. How can a CPA licensed in one State go to another and practice as a licensed professional? Can you see why this is an issue?

I have answered the question of whether you can transfer a CPA license from one State to another here, but in this article I want to get into the real details on the matter.

And now that we have discussed why CPA reciprocity is such a stickler, let’s have a look at how the rule makers have managed to make life a bit easier for CPAs.

The CPA Reciprocity Rules

Under the CPA reciprocity rules proposed collaboratively by both the AICPA and the NASBA, all States should have a uniform CPA exam requirement, similar to the uniform CPA exam (the CPA exam is the same no matter where you take it). By doing so, the idea is that all States can be deemed “equal” in their license granting practices and therefore CPAs from all States are considered equal in qualification.

So what have these proposed reciprocity rules led to? They have led to what’s called the “Uniform Accountancy Act” which prescribe 3 common CPA exam requirements. The three are as follows:

  • 150 credit hours of education
  • Passing the uniform CPA exam
  • Obtaining 12 months (1 year) of relevant work experience

The good news is that most States were able to accept these rules and thus most States have very similar CPA requirements. These States are thus called Substantially Equivalent States (SES).

But after all, each State is governed by a different governing body, and you always have outliers for several reasons (sometimes people just want to be difficult).

The Outliers from the CPA Reciprocity Rules

There are three main outliers from the CPA reciprocity rules:

  • Colorado
  • Puerto Rico
  • Virgin Islands

I can understand differences between the United States and US territories like the Virgin Islands…but Colorado? C’mon man…

These three are NOT considered Substantially Equivalent States.

The Border Line States

Then you have a handful of States that are almost 100% Substantially Equivalent States but there are slight nuances in how they are perceived when a CPA from these States applies for a CPA license in another State under the reciprocity rules. Basically, some of these States will be recognized and accepted under the CPA reciprocity rules by some States and not others.

These States are as follows:

  • California
  • Delaware
  • New Hampshire
  • Pennsylvania
  • Vermont
  • Wyoming

The good news is that all States are moving toward the Substantially Equivalent States status, so you might want to check with the specific State closer to when you are reading this article.

I will update the list above when I become aware of these States as fully being Substantially Equivalent in status in the future.

I can appreciate the fact that the CPA reciprocity rules can be confusing at times, so please feel free to ask your questions using the form below. I am here to help and will do my best to help you. All the best…

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