The 150-Hour Rule and the New 120-Hour CPA Pathway, Explained

8/18/2026

For a generation, the answer to "how many credits do I need to be a CPA?" was 150. That number is no longer the only answer. The model law that states draw on now recognizes a route to the CPA credential with a 120-hour bachelor's degree and an extra year of experience, and states are adopting it one by one. At the same time, the 150-hour requirement remains the law in many places and remains the route most candidates take.

This post explains where the 150-hour rule came from, how the 120-hour pathway works, what it does and does not change, and why the most important number for most candidates is not the licensure total at all but the hours needed to sit for the exam. It deliberately does not list states. Adoption and effective dates move every few months, so check your own board before you plan a degree around an hour count.

Where the 150-Hour Rule Came From

The 150-hour rule began as a profession-led push for more education, not as a government mandate. The AICPA's board adopted the goal of expanded education in the late 1970s. In 1988 the AICPA's members voted to require 150 semester hours of college education for new AICPA members, effective for applications after 2000. The model Uniform Accountancy Act, which the AICPA and NASBA publish for states to adopt, carried the 150-hour standard into licensure law, and over the following years almost every jurisdiction wrote it into its own statute.

The reasoning was that the body of knowledge a CPA needs had outgrown a four-year degree. Standards, tax law, auditing and technology were all expanding, and the profession wanted entrants with more depth in accounting and broader exposure to business, communication and ethics.

The cost of that choice became the center of the debate. A 150-hour requirement means roughly a fifth year of college: a master's program, a double major, extra undergraduate terms or community college credits. For many students it meant a fifth year of tuition and a year of delayed full-time earnings. As the profession began to worry about the number of new accounting graduates and CPA candidates, the extra year became the most frequently cited barrier.

What Changed: Three Pathways in the Model Law

In 2025 the AICPA and NASBA approved amendments to the Uniform Accountancy Act, published in its ninth edition, that recognize three education-and-experience routes to the CPA credential:

Pathway	Education	Experience
Graduate degree	Post-baccalaureate degree with an accounting concentration	One year
Traditional 150-hour	Bachelor's with an accounting concentration plus 30 additional semester credit hours	One year
120-hour	Bachelor's with an accounting concentration	Two years

All three still require passing the Uniform CPA Examination. The exam does not get easier or shorter on any route, and every candidate takes the same three Core sections and one Discipline section.

The 120-hour pathway trades a year of education for a year of experience. Instead of paying for 30 more credits before licensure, the candidate works an additional year under qualifying supervision. Because candidates on this route are already employed and earning, the economics are different: the extra year is paid rather than paid for.

What "accounting concentration" means

All three pathways require the degree to include an accounting concentration "or equivalent as determined by Board rule." That phrase matters. Each board decides what counts, typically by setting minimum hours of accounting content and business content and listing the subjects that qualify. Dropping the extra 30 hours does not drop the content requirements inside the degree. A candidate on the 120-hour route still needs a transcript that satisfies the board's accounting and business course rules.

How experience is defined

The model rules define one year of experience as full- or part-time employment over no less than a year and no more than three years, including no fewer than 2,000 hours of qualifying services. The work can be in public practice, industry, government or academia, and it must be verified by a licensed CPA. Boards set their own definitions, including how they measure the second year on the 120-hour route, so check the precise hour and time-span rules where you will be licensed.

Mobility: Why the Pathway Change Came Packaged With a Mobility Change

The education change could not happen alone, because CPA practice crosses state lines. Under the older model, mobility depended largely on "substantial equivalency": a CPA from a state whose rules were substantially equivalent to the model act could practice in other states under a practice privilege. If some states licensed CPAs with 120 hours and others still required 150, the old test could have left newly licensed CPAs unable to serve clients across state lines.

The ninth edition of the model act addresses that in two ways. It shifts mobility toward an individual-based test, in which a CPA's own education, exam and experience determine eligibility, rather than the home state's equivalency. It also provides a safe harbor for CPAs licensed under previously approved pathways, so existing CPAs are not caught out by the transition.

Each state has to adopt these provisions in its own law. During the transition, a candidate choosing the 120-hour route should confirm two things: that their own board offers it on the date they apply, and how the states where they expect to work treat CPAs licensed through it. Our post on holding a CPA license in multiple states covers how mobility works in practice.

Hours to Sit vs. Hours to License

This is the distinction that most changes a candidate's timeline, and it is separate from the 150-versus-120 question.

Hours to sit are the education a board requires before it authorizes you to take the CPA exam. Hours to license are the education the board requires before it issues the credential. They are often not the same number.

Many boards have long allowed candidates to sit at 120 hours, or at a bachelor's degree with sufficient accounting coursework, while requiring 150 hours for licensure. The current model act aligns with that: it makes a bachelor's degree with an accounting concentration the education requirement to sit for the exam, regardless of which licensure pathway the candidate eventually uses.

The planning consequence is large. A candidate who can sit at 120 hours can take exam sections during the last year of college or while earning the remaining 30 credits, running two clocks at once. A candidate who waits until 150 hours to begin the exam runs them in sequence. Same person, same effort, potentially a year apart. Our post on how long it takes to become a CPA walks through the sequencing in detail, and the CPA exam requirements page covers eligibility to sit.

Choosing Between 150 and 120: The Practical Trade-Offs

Where both routes are available, the choice is not obvious. Some considerations:

Cost and income. The 120-hour route avoids a fifth year of tuition and lets the candidate start full-time work a year earlier. The 150-hour route front-loads education cost but shortens the experience requirement to one year. Compare the total cost, including lost earnings, not just tuition.

Total time to the credential. On paper both routes take about five years from the start of college: four years of school plus two of work, or five years of school plus one of work (with exam sections fitted in along the way). In practice, the faster route depends on when you can sit for the exam, how quickly you pass it and whether your experience can run while you study.

What you want the extra 30 hours for. A master's degree in accounting, taxation or analytics can be worth having for its own sake: some employers recruit from those programs, some candidates want the depth before the exam, and some programs are designed around exam content. If the extra education has value to you beyond the hour count, the 150-hour route is not wasted.

Where you will practice. If you expect to work in states that have not adopted the new pathway, or in roles that involve frequent cross-border work, check how those states treat 120-hour CPAs during the transition.

Your employer's experience structure. The 120-hour route needs two years of experience verified by a licensed CPA. If your employer has no CPA who can verify your work, or your role is unlikely to qualify under your board's definition, the extra year of experience may be harder to obtain than the extra credits.

Existing credits. Candidates who already have well over 120 hours, through a double major, transfer credits or a second degree, may already be at or near 150. For them the question is moot.

Common Misreadings of the New Pathway

"The 150-hour rule has been abolished." It has not. The model law added a pathway; it did not remove the existing ones. Where a state has adopted the change, 150 hours plus one year of experience remains a valid route.

"I can get licensed with 120 hours anywhere now." Only where the board has adopted the pathway and it is in effect on the date of application. States are mid-transition, with different effective dates.

"The 120-hour route means less accounting coursework." The content requirements still apply. What drops away is the additional 30 hours, not the accounting concentration.

"The exam is easier on the 120-hour route." Every pathway requires the same Uniform CPA Examination, with the same scoring and the same credit window.

"Experience can be anything." It must meet the board's definition and be verified by a licensed CPA. Boards differ on the settings they accept and on supervision rules.

How to Plan Around Either Route

Choose the jurisdiction where you intend to be licensed. Not where you study, and not where a friend licensed.
Find two numbers from that board: education to sit and education to license, along with any content minimums.
Check pathway availability and the effective date. If a change is pending, confirm which rule applies on the date your application will be filed.
Model both routes if both are open. Include tuition, lost income and the realistic time to accumulate verified experience.
Start the exam as early as your board allows. The exam is the component most affected by momentum, and sitting while you finish education or begin work is the largest time saving available.
Document experience as you go. Record duties, dates and hours, and confirm your verifying CPA's license status before you rely on them.

Getting Started on the Exam

Whichever pathway you choose, the exam is the same, and for most candidates it is the longest single stretch of effort. The CPA Exam Prep All Parts Bundle covers all exam sections in one package, and candidates who prefer to buy section by section can start with a Core section such as AUD exam prep or REG exam prep. For a study plan that fits around work, see our CPA exam study schedule.

Frequently Asked Questions

Do you still need 150 credits to become a CPA?

In many states, yes, and 150 hours with one year of experience remains a valid route everywhere it has been the law. What has changed is that the model Uniform Accountancy Act now also recognizes a route with a bachelor's degree, an accounting concentration and two years of experience, and states are adopting it individually with their own effective dates. Whether 120 hours is enough for you depends on whether your board has adopted the pathway and whether it is in effect on the date you apply.

What is the 120-hour CPA pathway?

It is a licensure route in the ninth edition of the Uniform Accountancy Act: a bachelor's degree that includes an accounting concentration, two years of qualifying experience verified by a licensed CPA, and passing the Uniform CPA Examination. It replaces the additional 30 semester hours of the traditional route with a second year of experience. It does not change the exam, and the board's accounting and business content requirements still apply to the degree. Availability depends on adoption by your state.

Can I sit for the CPA exam with 120 credits?

In many jurisdictions, yes. Lots of boards have long let candidates sit with a bachelor's degree or 120 hours that include required accounting coursework, while requiring more for licensure. The current model act makes a bachelor's degree with an accounting concentration the requirement to sit, regardless of licensure pathway. Rules still vary, so confirm your board's requirement to sit separately from its requirement to license. Sitting early lets you take sections while finishing education or starting work.

Why was the 150-hour rule created?

The profession concluded that a four-year degree no longer covered what a new CPA needed to know. The AICPA's members voted in 1988 to require 150 hours of education for new AICPA members after 2000, and the model Uniform Accountancy Act carried the standard into licensure law, which states then adopted. Supporters cited the growing complexity of standards, tax and auditing; critics later pointed to the cost of a fifth year as a barrier to entering the profession.

Is the 120-hour pathway faster than the 150-hour route?

Not automatically. Both routes take about five years from the start of college: four years of study and two of work, or five years of study and one of work. The real differences are cost, because the 120-hour route replaces a year of tuition with a year of paid work, and how early you can sit for the exam and accumulate verified experience. A candidate who sits early and works under a qualified verifying CPA can move quickly on either route.

Will a CPA licensed through the 120-hour pathway be able to practice in other states?

That depends on how other states treat them. The updated model act moves mobility to an individual-based test and includes a safe harbor for CPAs licensed under previously approved pathways, but each state must enact those changes. During the transition, check how the states where you expect to serve clients handle practice privileges for CPAs licensed through the 120-hour route, particularly for attest work, before choosing it.