California Tax Preparer Bonds

Tax preparers in California are required by the California Tax Education Council (CTEC) to obtain a $5,000 tax preparer bond from a surety company before they are licensed to practice in the state of California. This is outlined in Division 8, Chapter 14 of the Business and Professions Code. Tax preparers can buy a California tax preparer bond instantly online from us today with no credit check. Get started below and receive your official bond delivered to you in minutes.

Our prices for California Tax Preparer Bond starts at $25 for a 1 year term. If you are more confident about the longevity of your tax preparer practice, you can get a 2 year bond for $45, 3 year bond for $50 or a 4 year bond for $64. Select how many years you want and purchase instantly today. Once you pay, we'll file the bond for you and send a PDF within 24 hours. Our form takes 3 minutes.

Sample Payment and Performance Bond Form
Sample Tax Preparer Bond Form (CA)
CA Tax Preparer Bond

Required By: California Tax Education Council (CTEC)

Bond Amount: $5,000

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California Tax Preparer Bond FAQs

Are there tax preparers that are exempt from getting this bond?

Yes, according to CTEC Code 22258, certain types of preparers are exempt from CTEC’s bonding requirement. We list them below:

  • California Certified Public Accountants (CPA)
  • Attorneys that are members of the California State Bar
  • Enrolled agents (EA) with the department of treasury
  • Financial institutions that are regulated by the state or federal government

Why is this bond needed?

A California tax preparer bond exists to protect clients from any financial harm caused by a tax preparer's negligence, fraud, or misconduct. The California Tax Education Council (CTEC) regulates tax preparers in the state and requires the bond to ensure that tax preparers are held accountable for their actions and that the general public have a way to seek compensation if they are harmed by a preparer's actions. Let’s illustrate this with an example. 

Jim has hired Nancy to help prepare taxes for his auto shop ahead of the tax deadline. Jim sent all relevant tax documents to Nancy ahead of time to ensure that his business’s taxes are filed on time, but Nancy forgets to submit the paperwork to the IRS! Jim’s business is then hit with a penalty of $10,000 for failing to file their taxes on time, so Jim looks up Nancy’s tax preparer license on CTEC and files a claim against her bond. Nancy’s surety company investigates the claim and determines that it is valid, so it pays out $5,000 to Jim. Note that even though Jim’s business lost $10,000 as a result of Nancy’s negligence, he was only able to receive repayment up to the bond limit of $5,000. The remaining $5,000 will have to settled in some other way, likely in a civil lawsuit. Nancy is also liable to pay $5,000 to the surety company, or they will cancel her bond, resulting in loss of her license. She must also report the claim to CTEC.

How long does it take to get a California Tax Preparer Bond?

The process only takes 3 minutes. You can pay with credit card securely on our site and receive the bond emailed out to you within minutes. All requests placed by 4pm CST will be processed and emailed out to you the same day. 

What information do you need for the bond?

Just your name, address, contact information and business name. No SSN or credit check needed. 

What do I need to do to become a licensed tax preparer in California? 

There are four steps to becoming a tax preparer within the state of California. Aspiring tax preparers must: 

  • Complete 60 hours of qualifying education related to federal and state tax laws from an approved provider either online or in person 
  • Purchase a $5,000 California tax preparer bond, ideally from a surety company listed on the US Treasury list of approved companies (all bonds from SuretyNow meet this designation) 
  • Obtain a preparer tax identification number from the Internal Revenue Service (IRS); IRS PTIN FAQ
  • Submit an application to the California Tax Education Council (CTEC)
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How long does it take to become a tax preparer? 

The entire process will take at least 4 weeks to complete, mostly contingent on how long it takes for you to complete the 60 hour qualifying education component. Here are the time by steps:

  • 60 hour qualifying education (anywhere from 1-6 months)
  • Getting a tax preparer bond (3 minutes from SuretyNow)
  • Getting a PTIN number from the IRS (15 minutes online, 3-4 weeks via paper process)
  • Getting application processed approved by CTEC (turnaround of 4-6 weeks

How can I avoid claims on my bond?

To understand how to avoid claims, it’s best to look at the most common violations that result in claims so that you, as a tax preparer, can avoid making the same mistakes.

  • Making untruthful statements to acquire customers 
  • Obtaining signatures from customers for a tax return that contains blank spaces
  • Failing to customers a copy of documents that they have signed on in a timely manner
  • Failing to maintain a copy of customer tax returns for four years from the date of completion or the return due date, whichever comes later
  • Failure to sign a customer’s tax return when payment for tax preparation services has been made

To avoid these common violations, tax preparers should:

  • Be truthful in their marketing material
  • Make sure there are no blank spaces in documents before they ask for customer signature
  • Always provide customers with copies of documents that they’ve signed in a timely manner
  • Make sure to keep a customer’s tax returns for at least 4 years (ideally more). Write down when a tax return can be discarded
  • Ensure timely performance and signature of tax services once payment has been received. 

How do I renew my license/bond? 

CTEC tax preparer licenses must be renewed annually as long as you are a practicing tax preparer. For renewal, tax preparers must: 

  • Complete 20 hours of continuing education from a CTEC approved provider
  • Renew your PTIN number with the IRS. This is completed on the official IRS website
  • Pay licensing fee to CTEC ($33 before October 31st, $55 afterward the October 31st cutoff) 
  • Maintain a tax preparer surety bond

For the surety bond requirement, you only need to renew the bond if it’s expiring/expired. For example, if your bond is a 2-year bond, then you only need to renew the bond after 2 years. This is separately managed from the licensing renewal, which needs to be done annually. If you bond with us, we’ll keep track of when your bond is expiring and notify you well ahead of time for renewal. 

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