The 150-Hour Rule for CPA Licensure: What Changed, and What Stayed the Same

For decades the 150-hour rule meant one thing: a bachelor's degree plus 30 more semester credits before a CPA license. That is no longer the only route. Since 2025 the model law that state legislatures copy from has offered a second, shorter-education route, and a majority of states have moved to adopt it. This article separates what is settled from what each state is still deciding, because staffing decisions at a firm depend on it.

What the model law now says

The AICPA and NASBA publish the Uniform Accountancy Act (UAA) jointly. Its ninth edition, updated in July 2025, recognizes three licensure pathways, and every one of them requires passing the CPA Exam:

1. A graduate degree with an accounting concentration plus one year of professional experience.
2. A bachelor's degree with an accounting concentration plus 30 additional semester credits (150 hours in total) plus one year of experience.
3. A bachelor's degree with an accounting concentration plus two years of professional experience. This is the new pathway, and it adds no credit hours beyond the bachelor's degree.

The two older pathways did not go away. The change is an addition, not a repeal. The AICPA's UAA page states the point directly: each jurisdiction decides whether and how to adopt the UAA, and adoption is not required.

The AICPA and NASBA approved the new pathway in May 2025. The model law is a template. A candidate can use the new pathway in a given state only after that state enacts legislation or adopts rules.

Exam eligibility is not licensure

Most confusion comes from mixing up two different gates.

• Exam eligibility is the education a board requires before a candidate can sit for the CPA Exam. Some jurisdictions let candidates sit after 120 semester hours that include specified accounting coursework. New York is an example: on its NASBA page, a candidate sits after 120 semester hours with one upper-level or graduate course each in financial accounting and reporting, cost or managerial accounting, taxation, and auditing. For candidates applying on or after November 21, 2026, New York adds accounting information systems and five business areas: information systems and technology, U.S. business law, business data analytics, economics, and finance.
• Licensure is the education, exam, and experience a board requires before it issues the license. The 150-hour rule lived here. The 2025 change also lives here: the third pathway changes the education a candidate needs at the licensure gate, and trades the extra 30 credits for a second year of experience.

A candidate who can sit for the exam at 120 hours was never licensed at 120 hours under the 150-hour model. Under the new pathway, a candidate with 120 hours and two years of qualifying experience is licensed, in a state that has enacted it.

Which states have acted

The AICPA reported that half of the states had adopted the third pathway and that 22 states planned to introduce legislation when sessions reconvened in 2026. CFO Dive's running tracker, updated July 14, 2026, counted more than 40 states and territories with action, including Puerto Rico, as bills kept passing through the 2026 sessions.

State-by-state facts from published coverage and state sources:

Virginia also passed the pathway in 2025. This list is a snapshot, not a complete count, and sources differ on how many states have enacted it. Effective dates and implementing rules continue to change as boards finish rulemaking.

California shows the long tail. Its new pathway starts January 1, 2027 and the legacy pathway ends January 1, 2029. Firms in states like that carry two populations of candidates at once.

What did not change

• Exam content and scoring. The CPA Exam is unchanged by the pathway. Every route requires a pass.
• The mobility rules moved. In February 2023 NASBA's board reaffirmed the 150-hour standard and warned that a state that lowered licensure to 120 hours would lose automatic substantial equivalency. The July 2025 UAA edition moved mobility to an individual basis and added safe-harbor language for existing licensees. See CPA mobility and practice privileges across state lines.
• State boards keep control. Oversight and discipline of licensees stay with each State Board of Accountancy.

What it means for a firm

Three planning points follow.

Recruiting. A graduate with 120 hours who has passed the exam can start the experience clock in a pathway state and reach a license in two years without a fifth year of tuition. For candidates recruited from a different state, the board that will issue the license sets the rules, not the board where they studied.

Supervision load. The new pathway lengthens the experience period from one year to two. More of a candidate's licensure experience happens inside your firm, under your supervision, so the sign-off on experience carries more weight. See CPA experience verification and supervisor responsibilities.

Pipeline. Accounting bachelor's and master's degrees awarded fell 6.6% in 2023-24 to 55,152, per the AICPA Trends report, and a shorter path is one lever the profession is using to rebuild supply. See CPA talent shortage and capacity strategies for small firms. For the full route from classroom to license, see how to become a CPA.

Sources

• AICPA and NASBA, Uniform Accountancy Act landing page
• NASBA, AICPA and NASBA Publish Ninth Edition of the UAA
• NASBA, New CPA Licensure Pathways and CPA Mobility
• NASBA, New York CPA Exam requirements
• AICPA, State policy trends shaping accounting in 2026
• Journal of Accountancy, NASBA upholds 150-hour education requirement for CPA licensure
• CFO Dive, Tracking CPA licensure paths
• Accounting Today, States move beyond the 150-hour rule for CPA licensure
• Journal of Accountancy, The accounting graduate pipeline: where do things stand

CORAA prepares ready-to-review audit files for US CPA firms from client books; you review and sign. See /us.

AU-C references are to AICPA Professional Standards, paraphrased here; read the standard itself before relying on a requirement. This page is guidance, not professional advice. Report an error