Ohio and Pennsylvania CPE Requirements: Yearly State Tax Updates
Whether you’re a Certified Public Accountant (CPA), professional tax preparer, tax attorney, or Enrolled Agent (EA), the vast majority of U.S. states require that you complete ongoing continuing education in order to be eligible for licensure as a tax professional in that state. These requirements are different from one state to the next, with some states requiring more CPE hours than others; however, virtually every state has at least some minimum requirement. The deadlines for completion also vary by state, as do the timeline within which you’re expected to attend CPE courses — some states are set up for annual course completion, with other requiring you to submit a certain number of completed hours either biennially or triennially.
It’s understandable why states would create these CPE requirements. After all, the tax code is updated every year at both the state and national level. Understanding these updates is an important part of being able to offer viable tax preparation and tax advising services to the public. By requiring tax professionals to take such courses, states are attempting to ensure that CPAs and other tax professionals keep themselves up to date on changes to the tax code.
In both Ohio and Pennsylvania, the deadline for completion of CPE hours is December 31st. That’s just a few months away, and it’s important to make sure that you’ve signed up for and completed any final CPE hours that you’re missing before the end of the year. This is also the time of year when Ohio and Pennsylvania have issued state tax updates, and we here at Basics & Beyond™ offer our end of year state tax update CPE seminars for both Ohio and Pennsylvania. These seminars are a great way to bring yourself up to speed on changes to the tax law, while also ensuring that you’ve earned enough CPE hours before the end of the year.
In this blog post, we’re going to take a look at the CPE hour requirements for Ohio and Pennsylvania. This way, you can check to see whether you’re in compliance with Ohio and Pennsylvania CPE requirements ahead of time, and sign up for any additional tax webinars or tax seminars as needed. Afterwards, we’ll take at some of the major changes to the tax code in Ohio and Pennsylvania. Ready to get started? Here we go!
CPE requirements in Ohio are determined by the Accountancy Board of Ohio. The Accountancy Board requires that any CPA who wishes to remain licensed and active in the state must earn 120 CPE hours on a triennial basis in order to practice — that is, they must earn at least 120 CPE hours over the course of every 3 years. If you’re a brand new CPA holding a permit in Ohio, you’ll be required to submit at least 40 hours over your first two years.
The triennial reporting period in Ohio begins on January 1st and ends on December 31st, three years later. While you do have until the end of the third year to complete all of your CPE requirements, the Accountancy Board also requires that you complete at least 20 CPE hours per year. In other words, you can’t simply wait until year three to take all of your CPE hours, or take them all in years one and two but skip the responsibility in year three. If you fail to complete at least 20 CPE hours each year, you will be fined $10 for each CPE hour that you’re deficient in that year.
Your Ohio CPE hours can be obtained in any field that considered to contribute to your professional competence as a CPA. Any course you take must be offered by a CPE sponsor that conforms to NASBA/AICPA CPE standards. It’s your responsibility as the person taking the course to collect and keep track of the necessary documentation as proof that you completed the course. There is typically a completion certificate of some kind that the CPE sponsor will issue to demonstrate that you’ve completed the course, although some CPE sponsors use a transcript instead.
If you are a CPA or PA who works with financial reporting engagements, or who performs financial reporting work outside the scope of public accounting while using your CPA designation, then you are required to earn a minimum of 24 of your 120 CPE hours in accounting or auditing. If you are a CPA or PA who works in taxation engagements or gives your clients tax advice, or if you do work related to taxes outside your public accounting practice while using your CPA designation, then you must earn at least 24 of your 120 hours in taxation.
Additionally, it’s required that all CPAs holding a permit in Ohio must take 3 CPE credit hours in Professional Standards and Responsibilities (PSR) each reporting period, meaning each triennial period. So long as the course is approved by the Accountancy Board, PSR credit can be obtained in ethical philosophy, professional ethics for CPAs, Ohio state accountancy law and rules, or the accountancy law and rules of another state besides Ohio.
In addition to obtaining CPE hours through NASBA-approved sponsors, CPE credit in ohio can also be obtained through self-study programs. However, self-study programs cannot exceed more than 50% of the total 120 hour requirement. Credit can also be obtained from college courses (again, not to exceed 50% of the total requirement), serving on committees at professional organizations (no more than 16 CPE hours in total), publishing articles or books (no more than 16 hours), peer review programs (no more than 50%), quality enhancement programs (no more than 50%), and by teaching or presenting material (no more than 50%).
Basics & Beyond offers both fall and end of year state tax update seminars in seven locations across Ohio from September through December. These seminars are a great way to earn a large number of CPE hours all at once, while bringing yourself up to date on changes to the tax code in your home state.
In Pennsylvania, the Pennsylvania Board of Accountancy has laid out CPE requirements for active, practicing CPAs. If you are a CPA in Pennsylvania, you are required to obtain at least 80 CPE hours on a biennial basis. This means that you must complete 80 CPE hours over the course of two years. The reporting period in Pennsylvania comes to a close on December 31st of the second year, and you are required to report these hours no later than January 31st (in other words, within one month).
In order to stay up to date with licensing requirements, you must earn at least 20 CPE hours per year in the state of Pennsylvania. This means that it is not possible to simply complete all of your required CPE hours in year one or two. Instead, you must complete at least 20 CPE hours each year.
It is common practice for the Pennsylvania Board of Accountancy to mail out a license renewal notice two to three months before you license expires. You can keep an eye out for this notice in the mail. However, keep in mind that this notice will be sent to the most recent address that the Board has on file for you, which may not be current.
The Pennsylvania Board of Accountancy accepts CPE hours offered by providers whose courses have been approved by the National Association of State Boards of Accounting (NASBA) and which meet the Quality Assurance Standards (QAS).
Out of the 80 CPE hours required in Pennsylvania, at least 4 of those hours must be earned in ethics-related education. Additionally, 8 hours must come from taxation, and 16 hours must come from accounting and attest materials.
In addition to obtaining CPE credit from a NASBA-approved provider, it’s possible to fulfill your CPE requirements in other ways in Pennsylvania. These include self-study programs (which may not account for more than 50% of your total requirements), peer review and quality enhancement programs (no more than 50%), publishing books or articles (no more than 16 of your total CPE hours), giving instruction in or presentation of materials (no more than 50% of total), serving on professional committees (no more than 16 hours), and taking university courses (no more than 50%).
Here at Basics & Beyond, we offer both fall and end of year Pennsylvania state tax update seminars. These seminars are an excellent way to obtain a large number of CPE hours at once, while also bringing yourself up to speed on recent changes to the tax code in Pennsylvania.
Ohio State Tax Updates
Over the past year, several major updates to the tax code have been made in Ohio.
This year, the Ohio state legislature revised the tax code §5733.40 related to distributive income. According to these changes, any compensation or guaranteed payments paid by a pass-through entity or a professional employer organization (PEO) on behalf of the pass-through entity to that pass-through entity’s owner will legally constitute a distributive share of income.
This change is retroactive and is applied back to January 1, 2013. Anyone affected by the retroactive change can file an original or amended return to apply for a refund, or file an application for a refund if a previous payment was made in error. Taxpayers can also file a reassessment petition if the state tax department previously issued an assessment.
Additionally, Governor Kasich has signed two bills which have resulted in changes to existing tax deductions. Following the new law, taxpayers can retroactively include certain subsidized health insurance premium costs as medical care expenses for 2017. Any medical care expenses exceeding 7.5% of a taxpayer’s Ohio Adjusted Gross Income (OAGI) can be deducted. These premium costs must have been paid in after tax dollars to be eligible, meaning that most employee payroll health insurance deductions fail to qualify.
Further, 529 savings plans have been expanded to allow for tax deductible contributions toward parochial or private K-12 tuition. This is in addition to previously allowed higher education contributions. The new maximum is $4,000 per year, per beneficiary.
In addition, a new change ot the tax law ensures that dependents can be claimed on Ohio state returns even if they are not claimed at the federal level.
Finally, the Ohio form IT/SD 2210 for calculating the interest penalty on the underpayment of Ohio individual income, school district income, and pass-through entity tax has been updated so that it bette conforms with the requirements set forth by Ohio law.
Pennsylvania State Tax Updates
Pennsylvania law requires the amount of a 100% deduction for depreciation under §168(k) to be added back to taxable income, but doesn’t provide a mechanism for cost recovery with respect to qualified property. For property placed in service after September 27, 2017, § 401(3)1. (s) will now allow the taxpayer to make an extra deduction when qualifying property is sold or disposed of during a tax year to the extent that the depreciation amount claimed hasn’t yet been fully recovered.
Pennsylvania has also introduced new 1099-MISC withholding tax requirements. Anyone making payments of Pennsylvania source non-employee compensation or business income to a non-resident individual or disregarded entity that has a non-resident member and is reported on a 1099-misc, or any lessee of Pennsylvania real estate who makes a lease payment as part of a trade or business to a non-resident lessor, must now withhold from those payments an amount equal to the current tax rate (3.07% at the time of writing).
Pennsylvania and Ohio CPE Requirements
There are many more annual state tax updates for Pennsylvania and Ohio which we can’t cover in full detail here. Adequately covering all of these updates requires a full day of study, which is why we’ve put together tax seminars for Ohio and Pennsylvania that specifically address end of year tax updates. If you’re looking to fulfill your Ohio CPE requirements or Pennsylvania CPE requirements before the December 31st deadline while simultaneously bringing yourself up to speed on changes to the tax code, these seminars are for you! Basics & Beyond’s CPE courses are NASBA-approved and taught by highly qualified professionals. Click here to register now.