CPA & Accounting Careers

CPA License Requirements: The 3 E’s Explained

By The Ledgerism Editorial Team · The Ledgerism Brief Editorial Team produces original, methodology-disclosed accounting and tax research—data trackers, databases, and reference guides built to be the most-cited source in the field. Every figure is verified against primary sources including FASB, the IRS, the PCAOB, NASBA, the AICPA, and state boards of accountancy.

CPA license requirements rest on three pillars every U.S. jurisdiction shares: Education, Examination, and Experience, known as the 3 E’s. In most states that has meant 150 semester hours of college credit, passing all four sections of the Uniform CPA Exam, and completing one year of verified accounting work. As of July 2026, the education pillar is changing fast: more than 40 states have enacted laws adding a pathway that swaps 30 of those credit hours for a second year of experience.

This page covers the standing bar you must clear, how each of the 3 E’s is defined, the new alternative pathways rolling out in 2025 and 2026, the separate ethics requirement, and where the rules vary by state. For the mechanics of sitting for the test, see the CPA Exam explained; for the step-by-step timeline, see how to become a CPA.

The 3 E’s at a glance

Licensure requires all three E’s, verified by a state board of accountancy, plus an ethics component in most states. Each state sets its own thresholds within a common national framework built by the AICPA and NASBA. The table below shows the traditional standard and what commonly varies.

Education: the 150-hour rule and its alternatives

The education requirement has meant a bachelor’s degree plus 150 total semester hours, roughly 30 hours beyond a standard four-year degree. States layer in minimums for accounting and business coursework, often 24 to 30 semester hours in accounting subjects like auditing, taxation, and financial reporting. The extra 30 hours can come from a master’s degree, a fifth year, or additional undergraduate credit.

The 150-hour rule is the requirement now in flux. To address a shrinking pipeline of new accountants, the AICPA and NASBA revised the model Uniform Accountancy Act to recognize a bachelor’s-plus-experience route alongside the traditional one. States must pass their own legislation to adopt it, and adoption is happening one jurisdiction at a time.

As of July 2026, more than 40 states plus Puerto Rico have enacted new pathway laws, and roughly two dozen jurisdictions have an active alternative that allows licensure with a bachelor’s degree (120 hours) and additional experience instead of 150 credit hours. Alaska has gone furthest, effectively removing the 150-hour mandate so that a bachelor’s degree plus qualifying experience can suffice. We track each jurisdiction’s status in the state CPA licensure tracker, and the broader shift is covered in our report on the 150-hour rule rollback.

The three pathways the revised model recognizes:

The new pathway does not lower the total investment so much as shift it. A candidate trades a fifth year of tuition for a second year of paid, supervised work. Whether that route is open to you depends entirely on whether your state has enacted it, so confirm with your board before planning around 120 hours.

Examination: the four-section Uniform CPA Exam

The examination requirement is passing all four sections of the Uniform CPA Exam with a score of 75 or higher on each, on a scaled 0 to 99 range. Since the CPA Evolution model took effect in January 2024, the exam has a Core-plus-Discipline structure: three mandatory Core sections and one Discipline section chosen by the candidate.

The three Core sections test skills every CPA needs:

1. AUD (Auditing and Attestation)
2. FAR (Financial Accounting and Reporting)
3. REG (Taxation and Regulation)

The candidate then picks one Discipline section:

1. BAR (Business Analysis and Reporting)
2. ISC (Information Systems and Control)
3. TCP (Tax Compliance and Planning)

The Discipline choice does not restrict what a licensed CPA can later practice; the license is general. Candidates must pass all four sections within a rolling window that starts when the first section is passed. That window ran 18 months for years, and a NASBA model change has led many states to extend it to 30 months. Section content, scoring, and the 2026 updates are detailed in our CPA Exam guide.

Experience: verified accounting work

The experience requirement is typically one year of relevant accounting work, often defined as about 2,000 hours, verified by a licensed CPA. Qualifying work can span public accounting, industry, government, or academia in many states, provided it involves accounting, attest, tax, or advisory skills. The verifying CPA attests to the nature and duration of the work on a form filed with the board.

Two variables matter most. First, duration: states on a traditional pathway generally require one year, while the new 120-hour pathway requires two. Second, supervision: some states require the experience to be supervised by an actively licensed CPA, and a few restrict who may sign the verification. Because experience rules are among the least uniform of the 3 E’s, candidates moving between states should confirm that prior work will transfer.

The ethics requirement

Most states add a fourth hurdle beyond the 3 E’s: an ethics exam. The common version is the AICPA’s self-study Professional Ethics course and exam, an open-book assessment usually requiring a score of 90% or higher to pass. It is taken online after passing the Uniform CPA Exam in many states.

Not every jurisdiction requires it, and some use a state-specific ethics exam covering their own accountancy statutes instead of, or in addition to, the AICPA version. Because the ethics step is separate from the CPA Exam and sometimes has its own deadline, candidates should slot it into their licensure timeline early rather than treating it as an afterthought.

How requirements vary by state

Licensure is granted by 55 U.S. jurisdictions (50 states plus D.C., Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands), and each sets its own rules within the national model. Beyond the 3 E’s themselves, common points of variation include:

• Residency and citizenship: some states require residency or a physical presence; a Social Security number is commonly requested but not universal.
• Minimum age: a handful of states set a minimum age (often 18 or 21).
• Exam window: 18 versus 30 months to pass all four sections.
• Experience length and supervision: one versus two years, and who may verify it.
• Ethics: AICPA course, a state exam, or none.

The revised model also changed how CPAs work across state lines. Mobility now hinges on an individual’s own education, exam, and experience rather than on whether their home state is deemed substantially equivalent to another. That individual-based approach is designed to preserve practice privileges as states adopt different education pathways.

FAQ

What are the 3 E’s of CPA licensure?

The 3 E’s are Education, Examination, and Experience. Education has traditionally meant a bachelor’s degree plus 150 semester hours. Examination means passing all four sections of the Uniform CPA Exam. Experience means at least one year of verified accounting work. Most states add an ethics exam as a separate requirement.

Do I still need 150 credit hours to become a CPA in 2026?

It depends on your state. The traditional 150-hour rule remains the most common route, but as of July 2026 more than 40 states have enacted an alternative pathway that allows licensure with a 120-hour bachelor’s degree plus two years of experience. Roughly two dozen jurisdictions have that pathway active. Confirm with your state board.

How many sections does the CPA Exam have?

Four. Under the CPA Evolution model effective January 2024, candidates pass three Core sections (AUD, FAR, REG) plus one Discipline section they choose (BAR, ISC, or TCP). A passing score is 75 or higher on each, and all four must be passed within a rolling window of 18 to 30 months depending on the state.

How much experience do I need for a CPA license?

Most states require one year of relevant accounting experience, often about 2,000 hours, verified by a licensed CPA. States that adopted the new 120-hour education pathway generally require two years instead. Qualifying work can occur in public accounting, industry, government, or academia in many jurisdictions.

Is the ethics exam required in every state?

No. Most states require an ethics exam, commonly the AICPA’s Professional Ethics course and exam with a 90% passing threshold, but not all do. Some jurisdictions use a state-specific ethics exam covering their own statutes. Because it is a separate step with its own deadline in some states, check your board’s rules early.

Does the CPA license differ from other accounting credentials?

Yes. The CPA is a state-issued license with the 3 E’s and ethics requirements described here, and it is the only credential that permits signing audit and attest reports. Other credentials, like the EA, CMA, or CFA, have different scopes and requirements. See our comparison of accounting certifications for how they line up.

Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.