State Tax Update: CPE Requirements for Illinois
In virtually every state nationwide, state boards determine licensure requirements for Certified Public Accountants (CPAs), Enrolled Agents (EAs), tax preparers, and tax attorneys. While the requirements for licensure vary from state to state, the vast majority of them require that tax professionals complete a certain number of Continuing Professional Education (CPE) hours on an annual, biennial, or triennial basis. The purpose of these CPE hours is to ensure that tax professionals stay up to date on changes in the tax code, both at the state and national levels. Given the frequency with which the tax code changes, it makes sense to establish rules and regulations that require CPAs, EAs, tax attorneys, and tax preparers to educate themselves prior to the following tax season.
Illinois is no different in that it has strict CPE requirements that must be adhered to. These include both general CPE hours as well as hours specific to ethics-related education. In order to maintain one’s license to practice in Illinois, it’s essential to fulfill these CPE requirements on a triennial basis.
With the September 30 deadline approaching for CPE hours in Illinois, you’ll want to ensure that you’ve fulfilled all of the requirements and are prepared well in advance. We’ve put together this informative blog post to review everything you need to know about CPE requirements in Illinois. We’ll also include an overview of some of the changes made to the tax code in 2017 and 2018, and how they’ll impact tax filing in the coming year. Specifically, we’ll discuss:
- CPE requirements for Illinois, including total hours, deadlines, limits, and more
- Overview of major changes to the tax code and Illinois tax law
Ready to learn more? Let’s get started.
Illinois CPE Requirements
As of 2006, Illinois state law began requiring that all Certified Public Accountants must obtain a license from the Illinois Department of Financial and Professional Regulation (IDFPR). The IDFPR regulates a wide variety of professions in Illinois in addition to CPAs. Without a license from the IDFPR, you won’t be able to practice as a CPA in the state of Illinois.
Once you have your initial licensure, there are further requirements to fulfill. Like most states, Illinois requires that CPAs renew their license on an ongoing basis. This renewal is only possible if an individual obtains a certain number of Continuing Professional Education (CPE) hours.
In Illinois, CPE hours and licensure are evaluated on a triennial basis. This means that the total number of hours you’ve accumulated and your status as a licensed CPA will only be evaluated once every three years in the state of Illinois, rather than on an annual or biennial basis (as is the case in many other states).
In order to renew your license in Illinois, you’ll need to complete at least 120 CPE hours. The purpose of this requirement is to ensure that all CPAs in Illinois stay up to date on changes and updates to tax filing requirements and tax law, both in Illinois and at the federal level. Illinois doesn’t have a minimum annual number of CPE hours, meaning that you could spread your hours out evenly across all three years, take 60 or so hours per year in two of the three years, or even take all 120 hours in a single year (although you’ll likely find this to be impractical from a scheduling perspective).
Some states require that a certain number of hours obtained as part of Continuing Professional Education come from a specific set of approved subject areas in accounting. For example, some states require that CPAs obtain a minimum number of hours in auditing, attest, taxation, or a number of other topics. In Illinois, the vast majority of the 120 hours you’re required to obtain can be in any general accounting subject. However, there is a requirement in place which dictates that at least 4 hours of “professional ethics” are included in your total CPE hours. If one examines the Illinois Public Accounting Act, there’s actually little in the way of guidance when it comes to describing what courses may or may not count as “professional ethics.” However, the commonly held opinion is that any courses dealing with the Code of Professional Conduct can count towards this requirement. Meanwhile, general ethics courses — such as those which discuss discrimination in the workplace, sexual harassment, and so on — are thought to be ineligible for meeting this requirement. In other words, “professional ethics” CPE hours must be focused on the practice of accounting specifically, rather than on ethical topics that apply in all workplaces regardless of industry or occupation.
In Illinois, “instructor units” are limited to no more than 60 hours. It’s also permissible to obtain up to 60 hours of non-verifiable CPE hours, but at least 60 of your total CPE credits from come from an approved provider. Non-verifiable CPE hours include those obtained from a program with no sponsor, time spent reading published accounting literature, time allotted to consulting with experts about a new skill or researching the skill yourself, and any time dedicated to attending committee or technical meetings. Specifically, time spent reading literature, consulting with experts or doing research, and attending meetings is limited to 10 hours out of the total requirement of 120. CPE credits related to personal development are limited to 24 out of 120, and any units associated with authorship of accounting material cannot exceed 60. Lastly, self-study CPE units are limited to no more than 80 total, of which no more than 60 can be from a non-interactive self-study course. Also, keep in mind that non-interactive self-study hours are only awarded at a rate of 50% of the time that you spend on the class. If you attend a college or university for an accounting-related course, one semester hour can count as the equivalent of 15 CPE hours (and one quarter hour counts as 10 CPE hours). If the course you’re taking isn’t for credit, each contact hour counts as 1 CPE hour.
As mentioned above, your CPA license expires on September 30th of your renewal year in Illinois. This renewal year is identical for everyone, regardless of when you first obtained your CPA licensure. This is different from many other states with biennial and triennial licensure requirements, where your license is renewed based on when your license was issued (or some other determining factor). It’s possible to begin the process of renewal up to two months prior to the renewal deadline of September 30th. When you’re ready to renew your license, you can visit the IDFPR renewal application page here.
Keep in mind that it’s not possible to roll hours from one renewal period forward to the next, or vice versa. This means that any CPE hours you earn during any given renewal period are only applicable within that renewal period.
It’s also extremely important to ensure that any CPE hours you obtain come from a CPE provider that is either approved by the IDFPR or the National Association of State Boards of Accountancy (NASBA). When it comes to CPE hours in Illinois, Basics & Beyond™ offers a wide variety of both in-person seminars and online webinars that are NASBA-approved, including year end tax updates with information specific to the state of Illinois.
Illinois 2018 State Tax Updates
As part of your total CPE hour requirements,, you’ll want to dedicate some portion of your time to attending tax seminars or tax webinars that are specifically focused on tax updates related to the state of Illinois. Basics & Beyond offers Illinois state tax seminars throughout the year, with several coming up in September just in time for the September 30th license renewal deadline.
Here, we’ll provide an overview of some of the biggest changes that have occurred within Illinois tax law over the past year. Keep in mind, though, that this information isn’t intended to be comprehensive. In order to ensure that you’re completely up to date on changes to the tax code, we highly recommend signing up for a dedicated in-person tax seminar.
That said, let’s take a look at some tax updates specific to Illinois, as well as federal tax updates that will impact Illinois.
Statewide Illinois Tax Lien Registry
Beginning this year, any accounting professional interested in finding a tax lien that has been filed by the Illinois Department of Revenue (IDOR) can now use a new, searchable database of liens. This Statewide Tax Lien Registry is intended to serve as the singular authoritative source for all liens (and lien releases) filed by the IDOR in Illinois. With more than 39,000 liens filed in 102 counties statewide in 2017, the Lien Registry contains a large amount of information that is now available for anyone to peruse. There is no fee or registration required. To access the Illinois Statewide Tax Lien Registry, click here,
In February 2018, Illinois Governor Bruce Rauner declared Kankakee, Vermillion, and Iroquois counties to be state disaster areas following the flooding that occurred there earlier in the same month. As a result, the Illinois Department of Revenue has offered to waive any and all penalties and interest related to taxpayers’ inability to file and pay their taxes on time as a result of flooding.
In order to apply for relief, Illinois taxpayers will need to send a written request to [email protected]. This request should include the following information:
- Written explanation of why the taxpayer cannot file or pay in a timeline manner (i.e. the flooding)
- Request that penalties and interest be waived
- Name and account number (or last four digits of social security number) of taxpayer
- Mailing address
- Estimate of when the taxpayer will be able to file or pay their taxes
Federal Tax Cuts and Jobs Act
In December of 2017, Congress passed the Tax Cuts and Jobs Act. Soon thereafter, President Donald Trump signed the act into law. Without question, the Tax Cuts and Jobs Act represents the most sweeping changes to the U.S. tax code in decades. The bill clocks in at a total of more than 1,100 pages. As a result, attempting to condense all of the changes to the tax code associated with this bill into the list below would be impossible. However, we’ll highlight some of the most important changes that have occurred (and which will impact tax filers in Illinois). If you haven’t already, we highly recommend signing up for a dedicated tax reform webinar which covers the Tax Cuts and Jobs Act tax reform in detail.
Some important changes to the tax code that will impact filers in Illinois include:
- Excess losses: § 461(1) prevents taxpayers (aside from corporations) from deducting an amount equal to a taxpayer’s excess business loss for any given tax year. The disallowed amount included in this section is deemed to be a net operating loss which is carried over to the following taxable year. However, unless the Illinois Income Tax Act is amended, excess business losses will be disallowed for trusts and estates. This is due to the way that Illinois treats federal net operating loss provisions.
- Net Operating Loss (NOL) Deduction: Following amendments to § 172(a) of the tax code, the Net Operating Loss deduction is now limited to 80% of taxable income. Carrying back of NOL is no longer allowed, but carrying these losses forward is permissible.
- Deduction for Pass-Through Business Income: A new section of the tax code, §199A, will allow non-corporate taxpayers to deduct 20% of their qualified business income for any given tax year. Keep in mind that partnerships and S corps are not allowed to use this deduction when computing their Personal Property Replacement tax. The deduction also cannot be used to compute AGI.
- 529 Savings Plans: § 529(c) has been amended such that the definition of “qualified higher education expenses” now includes tuition related to enrollment at an elementary or secondary school, whether that school is public, private, or religious. The subtraction modification to 529 plans in Illinois only applies to Illinois 529 plans, which define “eligible educational institutions” as public or private colleges, junior colleges, graduate schools, and certain vocational schools.
This is just a snapshot of some of the changes associated with the Tax Cuts and Jobs Act. Again, we recommend signing up for a dedicated tax reform webinar to learn more about how these changes relate to state tax updates in Illinois.
Fulfilling Your Illinois CPE Requirements
With the September 30th Illinois CPE requirement deadline just around the corner, it’s important to sign up for any remaining hours that you need in order to meet the 120 hour minimum. In addition to a variety of online tax webinars, Basics & Beyond is offering five in-person fall tax update seminars that will include information specific to Illinois. To register for a seminar or webinar now, click here.