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.
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.
When you have this bond, you are promising your clients that you will perform your duties in an honest and ethical manner.
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:
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:
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.
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:
Your license will need to be renewed each year. To renew your CTEC registration you will need to:
A Surety Bond is a written three-party contract in which the surety and the principal become obligated to the obligee for the payment of a sum of money if the obligation set forth in the bond is not fulfilled by the principal. Read more…
While it’s a common occurrence for people to confuse surety bonds with traditional insurance policies, they both function differently. Read more…
While often being compared to insurance policies, one big difference with surety bonds is how often you have to pay for your policy. Read more…
No one wants a claim made against their bond. But, what happens when a claim is made? Read more…