Key Takeaways
- Maryland Gov. Wes Moore signed HB643 in late April 2026, adding a third path to CPA licensure that drops the 150-hour college credit requirement. The law takes effect October 1, 2026.
- The alternative path requires a bachelor's degree, two years of professional experience and a passed CPA exam — no additional graduate coursework.
- About 39 states have now enacted alternative licensure routes, according to NASBA, marking a nationwide shift in how CPAs can qualify.
- Small CPA firms hiring for fall positions should update their candidate evaluation criteria now — candidates in the current pipeline may qualify under the new path by October 1.
- Interstate mobility under the alternative path still depends on state reciprocity rules — check NASBA before accepting candidates licensed from other states.
What did Maryland change — and why did it take this long?
Maryland replaced the 150-hour requirement with two years of supervised experience for CPA candidates who hold a bachelor's degree and have passed the exam.
The 150-hour rule — which typically means five years of post-secondary education — has been a fixture of CPA licensure since the late 1980s. Its intent was to raise the profession's educational bar. Its effect, over time, has been to narrow the pipeline. Fewer students are choosing to pursue accounting when an extra year of school is required and entry-level salaries haven't kept pace with the additional cost and time.
By late April 2026, when Gov. Wes Moore signed HB643, Maryland became approximately the 39th state to add an alternative route, according to the National Association of State Boards of Accountancy. The bill passed both chambers of the Maryland legislature with unanimous support — a bipartisan signal that the profession-wide concern about the talent shortage has reached the point where the political calculus has changed.
Jack Castonguay, an associate professor of accounting at Hofstra University who has tracked the reform movement, said the profession is "well past the tipping point." His concern now isn't whether states will pass the laws — it's whether the transition rules are clear enough for students who are already mid-process.
What does the alternative path actually require?
The Maryland alternative path requires three things: a bachelor's degree, a passed CPA exam and two years of professional experience. No 150-hour credit requirement.
That two-year experience component is the key tradeoff. The traditional path substitutes education for experience — the 150-hour model assumes that additional coursework prepares candidates for the profession's demands. The alternative path reverses that logic: it trusts that supervised experience in a real accounting environment is at least as good a preparation as an additional year of school.
For small CPA firms, this changes how you should frame your internship and early-career programs. A candidate who joins your firm after a four-year degree, completes two years of supervised work under a licensed CPA and passes the exam can now pursue licensure without returning to school. That's a meaningful recruiting pitch for candidates who were deterred by the traditional pathway's cost and timeline.
| Pathway | Education Required | Experience Required | CPA Exam |
|---|---|---|---|
| Traditional path | 150 credit hours (typically a master's degree or 5th year) | 1 year (varies by state) | Required |
| Alternative path (Maryland and ~38 other states) | Bachelor's degree (120 credit hours) | 2 years of professional experience | Required |
How many states have this — and which ones haven't moved yet?
About 39 states have enacted alternative licensure routes that reduce the educational requirement, according to NASBA. A handful of high-population states have moved recently or are still in progress.
New York's alternative path law was passed and goes into effect in November 2026, but Castonguay noted it "lacks some key details" — specifically, guidance for candidates who are already mid-process under the 150-hour rules. That ambiguity is creating anxiety among students who have already invested time and money in the traditional path and aren't sure whether or how the transition applies to them.
For hiring managers, the incomplete state-by-state guidance creates one practical complication: a candidate licensed under the alternative path in one state may face questions about whether that license carries full reciprocity in another state that implemented the alternative path differently. Until NASBA publishes clearer interstate mobility standards for the new paths, verify reciprocity before placing candidates in roles that require multi-state practice.
Is the traditional 150-hour path going away entirely?
No. The 150-hour path stays fully in place. The alternative route adds a second option for new candidates — it doesn't replace the original path.
Candidates who are already enrolled in fifth-year programs or pursuing a master's can continue on the traditional path without any disruption to their timeline or licensure status.
The reform movement has sometimes been framed as an attack on the traditional path, but the operational reality is simpler: states are creating a second option for candidates who want to trade an extra year of school for an extra year of supervised practice. Firms that value the depth of a master's-level education can still recruit for it and use the 150-hour path as a differentiator in job postings.
The more meaningful question for small firms is whether the alternative path opens your candidate pool enough to actually reduce the hiring difficulty you've been experiencing. That depends on your market. In states where accounting programs are well-established and candidates already trend toward master's degrees, the practical effect may be modest in the near term. In markets where the talent shortage is most acute, the alternative path could bring in candidates who were previously unable to complete licensure for financial or logistical reasons.
What should small CPA firms do before October 1?
Maryland firms have until October 1, 2026. If you're currently interviewing candidates or structuring fall internship offers, the transition window is open now.
The first step is reviewing your state's specific effective date and transition rules. If your state has already enacted its alternative path, those rules are in effect now. If you're in Maryland, October 1 is the date. Check the NASBA state tracker for the full list and any state-specific implementation guidance.
The second step is reviewing your candidate evaluation criteria. If your job postings or internal screening filters require 150 hours of college credit as a baseline, update them before the effective date in your state. A candidate who meets the alternative path requirements is fully qualified — filtering them out on credit hours alone means losing candidates you're entitled to hire.
The third step applies specifically to internship programs. If your firm uses internships as a licensure bridge, the two-year experience component of the alternative path counts toward the requirement. That means the structure of how you document and supervise intern work should be reviewed now. NASBA's guidance on what qualifies as "professional experience" under the new rules will govern whether those years count — confirm with your state board that your current supervision and documentation practices meet the standard.
What This Means for Your Hiring Pipeline
Firms in Maryland and New York can recruit under the alternative path now. Candidates interviewing for fall 2026 positions may qualify by their start date.
The near-term effect is clearest for firms in states with imminent effective dates: if you're in Maryland or New York, candidates interviewing now for fall positions may qualify under the alternative path by the time they start. That's a hiring conversation you can have today — and one that may attract candidates who had written off accounting firms that required the 150-hour path.
The longer-term effect is on how you pitch your firm to early-career candidates. A four-year accounting graduate who joins your practice, completes two years of supervised client work and passes the exam now has a clear path to full licensure without a master's degree. If your competitors haven't updated their recruiting messaging to reflect this, you have a window to differentiate.
One caveat that Castonguay emphasized: the transition period details matter as much as the law itself. Make sure any candidate who is mid-process under the traditional rules gets clear guidance from your state board before switching paths. The last thing you want is a candidate who disrupts a licensure timeline in progress based on incomplete information about the transition rules in their specific state.
What this reform signals about the profession's direction
The speed of adoption — about 39 states in roughly two years — suggests the profession reached consensus faster than most regulatory movements do. The talent shortage is acute enough that the AICPA, state boards and state legislatures aligned behind the same solution without the extended back-and-forth that typically characterizes licensing reform. That speed is unusual and worth noting. It suggests that if the alternative path doesn't move the talent needle enough — which is still an open empirical question — the profession has shown it can move quickly on structural changes when the problem is clear enough. The next conversation will likely be about compensation, not credentials.
