How to transfer a CPA License to Another State?

If you already possess a CPA license, you’ll be pleased to know that transferring it from one state to another is indeed possible. The process for transferring your license depends on the state where you originally obtained it and the state to which you wish to transfer. Additionally, whether the transfer is temporary or permanent will significantly influence the procedure.

In this article, we will review to you how to transfer your CPA license to another state.

Before we review how you can transfer your CPA license, you need to know some things.

CPA licenses are issued by “The State Board of Accountancy(of various states)” and they are valid only in one state and may not be recognized in another state.

This implies that the validity of your licenses functions in your home state and which may not be so in another state. This occurs because of the different rules governing each state, and it can be complicated sometimes.

Here are some crucial terms to know in transferring your license from one state to another:

Mobility

This simply means your ability to function in a state other than your home state without getting an additional license.

CPA mobility came into existence by the introduction of “substantial equivalency” under the Uniform Accountancy Acts.

This gives enough room for licensed CPAs who are in good terms and conditions to perform work in another state for a limited period while using their existing license.

Apart from the change being temporary, the owner of the license is also limited in terms of business to do.

Many states will only give you the privilege to use your CPA license in their state if your state has passed mobility laws.

Individual and Firm Mobility

Individual mobility gives you the chance to provide acknowledgment or unverified service in a state outside your home state. Examples of unverified services include document scanning or preparation, signature witnessing, consulting, and more.

Firm mobility, on the other hand, provides you with verified service in a state outside your state. Examples of firm mobility include authentication, review, examination, and more.

Substantial Equivalency 

This provides the ground on which CPA is allowed to be practiced in another.

Most of the state have the usual licensing measures thus:

1. 150 semester hours of  formal education

2. A minimum of one year of expertise

3. Successful completion of the uniform cap test

These are also known as the 3E, which means education, experience, and the CPA examination.

Therefore, if you met all the above requirements and have obtained a CPA license in your specific state, the principles of substantial equivalency would allow the CPA license holder to perform in another state.

Moreover, some states make use of a two-tier system. What does this mean? 

After the first step, a certificate will be issued, but it does not give the CPA the full right. Then, a license will be issued after completing another requirement.

So, an individual’s certificates or credentials would be regarded as “Substantial equivalency” only after the state board has supplied the licenses.

Reciprocity 

This term refers to the privilege of using your home CPA license whenever the laws permit.

This allows you to set up a business with your current CPA license and later exchange your current CPA license for an equivalent license in your new state.

Moreover, each state has its own set of applied rules concerning reciprocity. So, you will have to understand that your current state will determine the procedure of transferring your license as to where you wish to transfer your CPA license.

How to Know if You Can Transfer Your License?

CPA mobility.org is a tool created by NASBA and AICPA  to check the possibility of transferring your license.

How to use this tool

To use this tool, you will need to go to the website and follow this process:

1. Enter your business’s exact location: This means the state that issued the  CPA license to you.

2. Then, you will have to put down the state in which you propose to work.

3. You will need to choose the kind of services you will be practicing.

After completing this, you will click the submit button, and it will immediately review the individual requirements and the firm requirements.

Note that in order to work in another state outside your home state, you must possess a valid CPA license in your home state.

Checking if your credentials and license are valid in a state other than your home state can be challenging. The best approach is to use the useful tool developed by NASBA and AICPA: CPAmobility.org.

In addition, if this does not work out, you will need to contact the Accountancy boards in the state you are planning to work for more information.