California Tax Preparer Bond – Cost and Info

Tax preparers in California are required to purchase a California Tax Preparer surety bond before they can be issued a license. This is a legal requirement by the California Tax Education Council, also known as the CTEC.

Preparers must get their bond first and then register with the CTEC. Preparers may obtain their bond before they complete their tax course and receive their completion certificate, as long as they get their bond before they submit their registration.

For more information about bonding requirements, view the CTEC Bonding Requirements page.

What is a California Tax Preparer Bond?

A California Tax Preparer Bond is also called a CTEC Bond.

The California Tax Education Council has set the bond amount at $5,000.

A California Tax Preparer Bond is a type of surety bond that is required before a tax preparer can be licensed. A California Tax Preparer Bond promises that as a registered tax preparer, you will follow the rules and regulations of the industry.

The surety company who issues your bond is called the Surety. The CTEC is called the Obligee. And you are called the Principal.

If your clients suffer financial burden or feel you are not fulfilling your duties, they can make a claim on your bond.

When a claim is made on your bond, the surety bond company will investigate the claim.

If the claim is determined to be valid, the surety company will allow you to satisfy the claim.
If you fail to satisfy the claim, the surety company will satisfy it (up to the full $5,000 bond amount.) The surety company will then come to you for repayment.

When you have this bond, you are promising your clients that you will perform your duties in an honest and ethical manner.

Who needs this bond?

The State of California Franchise Tax Board states that you must register as a tax preparer and secure a bond if you, for a fee, assist with or prepare State and/or Federal income tax returns.

You are exempt from getting this license (and therefore the bond) if:

You are a California Public Accountant (CPA)
You are an attorney or a member of the State Bar of California
You are an enrolled agent
You are an exempt banking or trust official

How much does a California Tax Preparer Bond cost?

The bond amount is set at $5,000, but you do not need to pay $5,000 to get bonded. California Tax Preparer Bonds are very inexpensive.

These bonds do not require a credit check and are instant issue.

Most people can get bonded for just $100. You can complete your purchase entirely online.

Get pre-approved instantly below:

What else do I need to know?

A CA Tax Preparer Bond is not an insurance policy. It does not protect you; it protects your clients. If your clients feel you have wronged them, they can make a claim against your CA Tax Preparer Bond.

For information on what happens if a claim is made on your bond, view our “What Happens if a Claim is Made on my Surety Bond” post.

For information on when you must get your bond, view the CTEC Bonding Requirements.

Getting licensed as a California Registered Tax Preparer

Also note that the bond is not all that is required to become a California Registered Tax Preparer. You will also need to complete the other requirements to get your license which include:

Taking a 60-hour qualifying education course from a CTEC approved provider within the last 18 months of applying for your license.
Obtaining a Preparer Tax Identification Number (PTIN) from the IRS
Registering and submitting the $33 online registration fee

Your license will need to be renewed each year. To renew your CTEC registration you will need to:

Take a minimum of 20 hours of continuing education from a CTEC approved provider, which must include 15 hours of federal tax curriculum
Renew your PTIN number with the IRS
Maintain (renew) your California Tax Preparer Bond – you can do this with the surety company you purchased your bond through
Renew your registration and submit the registration fee before the expiration deadline (October 31 of each year)

Helpful Resources:

CTEC Bonding Requirements

About Surety Solutions, A Gallagher Company

Surety Solutions makes the process of getting your surety bond quick and easy. We’re committed to uphold our culture of trust, honesty and great customer service.

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Duke Revard

Duke Revard was the VP of Sales & Marketing at Surety Solutions where he spread the word about the innovative surety solutions available to local insurance agents and large brokers.