CPA & Accounting Careers
The 150-Hour Rule for CPA Licensure, Explained
The 150 credit hour rule requires anyone seeking a CPA license to complete 150 semester credit hours of college coursework, roughly 30 hours beyond a standard four-year bachelor’s degree of 120 hours. All 55 U.S. jurisdictions still require 150 hours for full licensure, though most now offer an alternative path that trades the extra 30 credits for added work experience.
The rule separates two distinct milestones: sitting for the CPA Exam and getting licensed. Many states let candidates sit at 120 hours but withhold the license until they hit 150. Understanding where those thresholds fall in your state can save a year of tuition and lost income.
What is the 150 credit hour rule?
The 150 credit hour rule is an education requirement for CPA licensure that mandates 150 semester hours of postsecondary coursework, about 30 more than a typical bachelor’s degree. It was proposed by the AICPA in 1988 and adopted state by state through the 1990s and 2000s. It sets the ceiling for licensure, not a degree by itself.
A bachelor’s degree in accounting usually carries 120 semester hours. The extra 30 hours can come from a master’s degree, additional undergraduate courses, or credit earned through other accepted means. Most states also specify a minimum number of accounting and business credits inside that 150, commonly 24 to 30 hours each, so the total is not filler.
The rule applies to the license, which is what lets you sign audit reports and hold out as a CPA. Passing the four Exam sections and meeting the experience requirement (usually one year) are separate steps that stack on top of the education threshold.
150 vs 120: sitting versus licensure
The 120-hour figure is what many states accept to sit for the CPA Exam; 150 hours is what nearly every state requires to be licensed. As of 2026, about 29 jurisdictions let candidates test at 120 hours, while all 55 require 150 hours for the license under the traditional path.
This gap matters for timing. A candidate can often finish a bachelor’s degree, sit for the Exam during a graduate program or gap year, and then complete the final credits before licensure. Testing earlier, while coursework is fresh, is a common strategy.
Some states require the full 150 hours before you sit at all. Others, such as those following the newer model rules, allow testing at 120. Check your state board’s rule directly, because the sit-versus-license threshold varies by jurisdiction and changes as legislatures act.
How to reach 150 credit hours
Reaching 150 hours means adding roughly 30 credits to a standard bachelor’s degree, and candidates can do this through graduate study, extra undergraduate courses, or lower-cost credit options. The path you choose affects total cost, time, and whether you also earn a second credential.
The most common route is a master’s degree, often a Master of Accountancy (MAcc) or an MBA, which typically adds 30 or more graduate credits and can qualify you to sit at the same time. Others stay at the undergraduate level, taking extra courses or a double major to reach 150 without a second degree.
| Pathway to 150 hours | How it works | Typical added time | Relative cost | Notes |
|---|---|---|---|---|
| Master of Accountancy (MAcc) | 30+ graduate credits after a bachelor’s | 1 year | Higher | Deepens accounting knowledge; often exam-focused |
| MBA | 30+ graduate credits, broader business | 1 to 2 years | Higher | Useful for management-track roles |
| Integrated 5-year program | Combined bachelor’s plus master’s | 1 extra year | Moderate to high | Streamlined, single application |
| Extra undergraduate courses | 30 more credits, no second degree | Varies | Lower | Community college credits often transfer |
| Double major or minor | Load extra credits during the degree | Little to none | Lowest | Requires planning early in the program |
| Credit by exam (CLEP, etc.) | Test out of general courses | Weeks to months | Lowest | Acceptance varies by state and school |
Community college and accredited online courses can fill the gap far cheaper than a fifth year at a four-year school, and many boards accept them as long as the institution is regionally accredited and the accounting-course minimums are met. Confirm acceptance with your state board before enrolling.
The 2025-2026 move toward a 120-plus-experience path
In 2025, the AICPA and NASBA revised the Uniform Accountancy Act (UAA) to add a third licensure path: a bachelor’s degree (120 hours) plus two years of experience, in place of the extra 30 credits. By mid-2026, more than half of U.S. jurisdictions had enacted some version of this alternative.
The model rules now recognize three routes to licensure, each still requiring passage of the CPA Exam. The tradeoff is straightforward: candidates who skip the fifth year of school take on an additional year of qualifying work experience instead.
| UAA licensure pathway (2025 model) | Education | Experience | Exam |
|---|---|---|---|
| Graduate degree | Master’s in accounting | 1 year | Pass all sections |
| Traditional 150-hour | Bachelor’s plus 30 credits (150 total) | 1 year | Pass all sections |
| New 120-hour | Bachelor’s (120 hours) | 2 years | Pass all sections |
The change also reshaped CPA mobility. The UAA now ties practice privileges across state lines to a CPA’s individual qualifications (education, exam, and experience) rather than to whether their home state holds “substantial equivalency” status. This individual-based model aims to keep licenses portable even as states adopt different pathways.
Adoption is uneven. Each state legislature and board must enact the change on its own timeline, so effective dates differ and some states have moved faster than others. States reported to have adopted a 120-plus-experience alternative include Arizona, California, Florida, Georgia, Illinois, Indiana, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, Washington, and Wisconsin, among others. Our state CPA licensure tracker follows the status for all 55 jurisdictions, and the rollback news report covers the pace of change.
Criticism of the 150-hour rule
Critics argue the 150-hour rule raises the cost of entry without measurably improving CPA quality, and that it worsened the accounting talent shortage. An MIT Sloan study examining 1986 to 2019 found the rule was associated with a 14% drop in new CPAs and a 26% drop in minority entrants, with no evidence of improved service quality.
The cost objection is central. A fifth year of school can add tens of thousands of dollars in tuition plus a forgone year of salary, a burden that falls hardest on candidates with the least financial cushion. That equity concern drove much of the 2025 UAA reform.
Defenders of the traditional path note that the extra coursework can build depth in areas like tax, audit, and data analytics that a 120-hour program may cover thinly. The 2025 changes keep 150 hours as a recognized route rather than abolishing it, letting candidates choose the mix of education and experience that fits their situation.
Frequently asked questions
Do all states still require 150 credit hours for a CPA license?
All 55 U.S. jurisdictions still recognize the 150-hour path for licensure, but as of 2026 more than half also offer an alternative requiring only 120 hours plus two years of experience. No jurisdiction has fully eliminated 150 hours; they have added a second option. Which paths are available, and their effective dates, depend on your specific state board.
Can I sit for the CPA Exam with only 120 credit hours?
In many states, yes. About 29 jurisdictions let candidates sit for the CPA Exam at 120 hours, then require the full 150 (or the 120-plus-experience alternative) before licensure. Other states require 150 hours before you can test. Because this varies, confirm the sit threshold with your own state board before scheduling any Exam sections.
What is the cheapest way to reach 150 credit hours?
The lowest-cost routes usually avoid a fifth year at a four-year university. Extra undergraduate credits from an accredited community college, accredited online courses, or credit-by-exam options like CLEP can fill the 30-hour gap for far less than a master’s degree. Acceptance depends on regional accreditation and your state’s accounting-course minimums, so verify eligibility first.
Does a master’s degree count toward the 150 hours?
Yes. A Master of Accountancy or MBA typically adds 30 or more graduate credits, which usually satisfies the 30-hour gap between a 120-hour bachelor’s and the 150-hour requirement. Many candidates use graduate study both to reach 150 hours and to prepare for the Exam. The degree must come from an accredited institution recognized by your state board.
Is the 150-hour rule being eliminated?
No jurisdiction has eliminated it. The 2025 Uniform Accountancy Act update added a 120-hour-plus-two-years-of-experience path alongside the traditional 150-hour route, and states are adopting it individually. The 150-hour rule remains one of several recognized pathways, so candidates who prefer additional coursework can still use it.
How does the new 120-hour pathway affect CPA mobility?
Under the 2025 UAA, cross-state practice privileges now depend on a CPA’s individual qualifications rather than on whether their home state is “substantially equivalent.” This individual-based mobility model is designed to keep licenses portable even when states adopt different education and experience combinations. Actual portability still depends on each state enacting the updated mobility provisions.
To see how the credit-hour rule fits the full path to licensure, read our guide on how to become a CPA and the CPA Exam guide. For the credential itself, see what a CPA is.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.