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Home › Blog › 150-Hour Rule Explained

The 150-hour rule: Understanding CPA requirements and how to meet them

Published: September 3, 2025

If you’ve done any research into what it takes to become a Certified Public Accountant (CPA), then you’re probably familiar with the 150-hour rule. This rule states that you need at least 150 college credit hours to become a CPA. It helps ensure that you have the requisite education necessary to successfully perform the duties expected of a CPA, but meeting this requirement can be a challenge for some.

Let’s dive into what it means, how to meet this requirement and whether this rule may be changing in the future.

What is a CPA?

A Certified Public Accountant or CPA is a prestigious professional license in the accounting field. You must earn this license through your state’s licensing board, typically a state board of accountancy. All CPAs are accountants, but not all accountants are CPAs.

CPAs may have more responsibilities and expanded job opportunities compared to non-CPA accountants because of the education and experience needed to earn their license. For instance, CPAs can prepare certain financial audits and represent clients in IRS proceedings.

CPA benefits

Although it may not be necessary for every accountant’s career, some of the benefits of pursuing CPA licensure include:

• Salary bump: According to the Association of International Certified Professional Accountants (AICPA), CPAs earn an average of 10-15% more than regular accountants.
• Greater job opportunities: CPAs will likely have an easier time ascending the corporate ladder and achieving leadership and executive positions.
• Start your own business: The CPA credential can make it easier to start your own accounting business and establish a reputation that clients trust.
• Stay on top of relevant laws and accounting regulations: The exam process that all CPAs must undertake can keep you up to date on numerous laws, regulations and best practices applicable to the field of accounting.

Do I need to become a CPA?

As advantageous as the CPA title may be, it’s not absolutely necessary for every accounting professional.

“According to the Institute of Management Accountants (IMA), 75% of professionals working in accounting careers work in management accounting. With that being said, only a small percentage of accountants have the CPA designation,” said Dr. Tanae Acolatse, Program Manager for the Bachelor of Science in Accounting program at Colorado State University (CSU) Global. “If you are interested in working in a public accounting firm, then the CPA is highly recommended. However, as an accountant, you have other options for certifications that are just as reputable and recognized as the CPA.”

These include, but are not limited to:

• Certified Management Accountant (CMA) for those who are interested in careers in management accounting. “The CMA is starting to appear more often on job postings along with the CPA,” Acolatse said.
  
• Certified Fraud Examiner (CFE) for those interested in forensic accounting and fraud investigations.
• Certified Internal Auditor (CIA) for those who are interested in internal auditing.
• Certified Information Systems Auditor (CISA) for those interested in information technology (IT) auditing or accounting information systems.

“Choosing a certification other than the CPA really depends on what type of work you are interested in. The important thing to note is that any of these certifications are great to have because they will increase your earning potential and career opportunities,” Acolatse said. “My advice to anyone interested in a long-term accounting career is to get a certification.”

What are the requirements to become a CPA?

Individual states administer CPA licenses, meaning the requirements and process for becoming a CPA can vary slightly depending on where you live. For the most part, the requirements are fairly uniform:

• Education: All states require you to complete at least 120 credit hours (the equivalent of a bachelor’s degree) to sit for the CPA exam. Your undergraduate degree must have an accounting or finance focus to qualify—majoring in a completely unrelated field won’t cut it. In addition, most states require 150 hours to actually achieve licensure as a CPA, with a few recent exceptions.
• Experience: You must complete some real-life professional experience, paid or unpaid. Most states require approximately one year of full-time experience, or about 2,000 hours.
• Examination: All states require applicants to pass the CPA exam from the National Association of State Boards of Accountancy (NASBA).

How to fulfill the 150-hour requirement

You’ve probably noticed that most bachelor’s degrees only consist of about 120 credit hours—so how can you close that 30-hour gap? 

Is the 150-hour rule changing?

Although states have maintained the 150-hour rule for decades, some are rethinking their CPA education requirements. Critics argue that the cost of additional education needed to meet this requirement can create a financial burden that puts CPA licensure out of reach for some.

Ohio, Utah and Virginia passed bills in 2025 that adds an alternative pathway for the CPA applicants. Those who complete 120 credit hours plus two years of professional experience and pass the CPA exam can qualify for licensure. Several other states have introduced or discussed similar legislation.

The 150-hour rule remains firmly in place in most states, but further changes could be on the horizon.

“There has been a major change in the CPA requirements,” Acolatse said. “While accountants still have to meet the 150-hour requirement for licensure, now, over 20 states have changed these stipulations so that with a bachelor’s degree in accounting, you are eligible to sit for the exam. Also, once you have a license, you can practice in any state.”

Applying for CPA licensure: What comes next

Once you’ve completed the three E’s of CPA licensure—education, experience and exam—plus any state-specific requirements, you’re ready to apply for your CPA license. Contact your state board of accountancy for full details. You can expect to fill out an application that includes your academic transcripts, CPA exam test scores and a document that attests to your professional experience. Once approved, you’ll be a full-fledged CPA.

If you’re ready to take the next step towards your CPA career but are still looking for ways to fulfill the 150-hour requirement, click our Find Schools button to browse accounting programs today.