Why does getting licensed as a finance professional feel like solving a puzzle where every state has its own rules? Because that’s exactly what it is.
Whether you’re aiming to become a CPA, financial planner, or any other credentialed expert, each state enforces its own requirements, sometimes slightly different, sometimes drastically so. Education, experience, exam structure, even the titles you can use – all of it depends on where you plan to practice.
What’s important is not to view this as just another bureaucratic hurdle, but a crucial part of your career planning. Namely, if you choose the wrong approach, you could spend years earning credentials that don’t transfer smoothly across state lines. Likewise, if you move without preparation, you might have to jump through extra hoops to get licensed all over again.
On the other hand, if you take some time to understand state-by-state differences upfront, you’ll avoid surprises and make smarter career choices so you can get paid what you deserve. Here’s everything you need to know.
Why Do States Have Different Requirements?
Let’s tackle the basics first: why are there differing requirements?
Well, since the United States operates under a federal system, it grants individual states the authority to regulate professions within their borders. That autonomy means that each state’s Board of Accountancy sets its own criteria for CPA licensure, which results in variations in not only educational prerequisites but also work experience and examination specifics.
Educational Requirements: The 150-Hour Rule
Most states mandate that CPA candidates complete 150 semester hours of post-secondary education, which often exceeds a standard bachelor’s degree. This requirement ensures CPAs have a solid foundation in accounting, business, and ethics before entering the profession.
However, the educational requirements for CPA licensure aren’t uniform across states. Some jurisdictions allow candidates to sit for the CPA exam after completing only 120 hours but require the full 150 hours before granting a license. Others have stricter guidelines on acceptable coursework or credit distribution.
Understanding exactly what your state requires – and how it compares to others – can help you plan your education strategically and avoid delays in the licensing process.
Work Experience: A Diverse Landscape
Now, while gaining practical experience is a universal requirement, the specifics vary here as well. One year of accounting work is a common benchmark, but the definition of “one year” isn’t consistent across states.
For example, Hawaii requires 1,500 hours of experience without specifying a timeframe, whereas North Carolina mandates a minimum of 30 hours per week for 52 weeks, totaling 1,560 hours. So, if you miss a week, you might need to start over. Arkansas, on the other hand, sets its requirement at 2,000 total hours.
Two-Tier States: Certificates vs. Licenses
It’s also important to know that some states operate under a two-tier system, issuing a CPA certificate upon passing the exam and a license after fulfilling additional experience requirements.
States like Alabama, Connecticut, and Illinois follow this model. In Nebraska, for example, individuals receive a certificate after passing the CPA exam but must complete specific experience requirements to obtain a permit to practice.
Understanding these variances is crucial because your career aspirations – whether aiming for public accounting, corporate finance, or academia – may dictate the best state for licensure. Additionally, if you plan to practice in multiple states, being aware of each state’s requirements becomes essential.
Navigating Career Moves: Preparation is Key
If you’re considering a move to another state or expanding your practice across state lines, you’ll need to familiarize yourself with the new state’s CPA requirements.
While the Uniform Accountancy Act (UAA) aims to standardize licensure requirements and promote reciprocity, not all states have adopted its provisions uniformly. In practical terms, this means that transferring your CPA license might involve additional steps, such as meeting different experience or educational criteria.
Recent Trends: The Accountant Shortage
The accounting profession is facing a notable shortage of CPAs, prompting some states to reevaluate their licensure requirements. Ohio, for instance, has become the first state to address this shortage by easing certification requirements.
Starting January 1, 2026, aspiring CPAs in Ohio can be certified with a bachelor’s degree and two years of related experience or a master’s degree and one year of experience, in addition to passing the exam.
Conclusion
Making sense of the state-specific CPA licensing requirements can be tricky, but it’s a vital step for finance professionals. Take time to understand and proactively manage these variances, and you’ll position yourself for a successful and adaptable career in accounting. And this is true whether you’re just starting or contemplating a career move – staying informed and prepared is your best strategy.
