Retiring? Slow down long enough to properly maintain your CPA certificate
November 2018 Footnote
Those who believe life slows down in retirement haven't met many of today's retirees. From traveling to hobbies to volunteering, you're just getting started!
Have your sights set on retirement? Do yourself a favor and slow down long enough to think through maintaining your CPA certificate going forward. Too many CPAs miss this step and end up in compliance hot water.
But not you. You've got a plan -- this plan.
Pick your CPA status
The Minnesota Board of Accountancy (BOA) offers three CPA certificate status options: active, inactive and exempt. Note: The BOA currently does not have a retired status option.
- Renew annually by Dec. 31.
- 120 CPE credits required.
Retired CPAs who continue to work in public accounting must maintain an active CPA certificate. It's also an appropriate option for anyone wishing to use the credential without restriction.
- Renew annually by Dec. 31.
- No CPE requirement, once you have switched to inactive status.
This is a good option for retired CPAs who don't work in public accounting but wish to continue using the CPA credential. Inactive CPAs must use the inactive modifier in conjunction with the designation. Example: Sally Jones, CPA (inactive)
- No annual renewal requirement.
- No CPE requirement.
CPAs who are exempt cannot use the CPA designation in any way. It's intended for retired CPAs who have no plans to continue working.
Don't make the decision to go exempt lightly. It's a cumbersome process to switch from exempt to active status down the road, including earning CPE within a specific timeframe. Credits required is dependent on how long your certificate was exempt. Switching from exempt to inactive is not allowed.
Timing is important
A status switch from active to inactive or exempt must be made by Dec. 31 and is effective Jan. 1. This change is only allowed if you've met the CPE requirements for the three-year period that ended the previous June 30.
If you're late in renewing as inactive or exempt, not only are you out of compliance, but you'll also owe both the delinquency fee and the CPE late reporting fee (if you missed reporting to the BOA by Dec. 31).
Whatever you do, renew
Too many retiring CPAs make the mistake of believing that not renewing is a viable option. It's not. Why? Failure to renew your CPA certificate two years in a row will result in the BOA revoking your certificate. If this happens, not only are you no longer a CPA, but you'll have a public order of disciplinary action against you.
Did your firm update their roster?
Firm permit renewal is dependent on CPA partners, shareholders, members, managers, directors and officers within a firm properly renewing their individual CPA certificates. Collectively, this group is referred to as "owners" within the BOA's renewal form. Retired CPAs still marked as an owner for the firm could impact the firm's ability to renew properly.
Avoid issues by confirming you are no longer listed as an owner on your previous firm's firm permit.
Update your info
Does the BOA know how to reach you in retirement? Ensure your answer is yes by updating your contact information in writing. Have questions? Contact the BOA at 651-296-7938 or www.boa.state.mn.us.
Let the MNCPA know of changes to your contact information, too. Reach out to MNCPA customer service at 952-831-2707 or firstname.lastname@example.org to update your member record.
Retired Member Directory offers support
Your retired CPA peers are a wealth of knowledge, especially when it comes to selling a CPA firm. Learn from their successes and challenges by reaching out via this online directory.