The 150-Hour Rule: Why Accounting Majors Need a Fifth Year for the CPA
By Muntasir Minhaz • Published Aug 04, 2026 • Graduate & Professional School
Most states still require 150 college credit hours, 30 more than a standard bachelor's degree, before you sit for the CPA license, though a growing number of states now accept 120 hours plus two years of work experience instead.
🎓 150 hours = a 120-credit bachelor's degree plus 30 more credits, often a fifth year
⏱️ Students meet the extra 30 credits with a master's in accounting, a double major, or extra coursework
📩 About 43 states have added a 120-hour alternative path since 2024, requiring two years of experience instead of one
New York still requires 150 hours and adds stricter course rules starting August 1, 2027
Check your specific state board before you plan your fifth year
What the 150-hour rule requires
A standard bachelor's degree runs about 120 credit hours. The 150-hour rule, adopted state by state over the past three decades, requires an extra 30 credit hours, roughly a fifth year of study, before you qualify to sit for the CPA exam and hold a license in most states.
The rule does not require a specific degree for those extra 30 hours. Some states specify a minimum number of accounting or business credits within the 150, so check your state board of accountancy's exact breakdown before you plan your coursework.
Why the extra credit hours exist
State boards adopted the 150-hour standard to push accounting education closer to a master's level of depth, covering more advanced accounting, tax, and business topics than a four-year degree alone provides. The rule became the norm across most states by the early 2000s and stayed the standard path into the CPA profession for two decades.
How students meet the requirement
A fifth-year Master of Accountancy (MAcc), often built into five-year integrated programs at the same university.
A general master's degree, such as an MBA with an accounting concentration, paired with the right undergraduate coursework.
A double major or minor that adds credits without a separate graduate degree.
Extra undergraduate or community college credits taken during or after your bachelor's degree, without pursuing a full master's.
The rule is loosening in most states
Since 2024, the accounting profession has pushed to widen entry into the CPA pipeline amid a documented shortage of new accountants. The American Institute of CPAs and the National Association of State Boards of Accountancy released an updated Uniform Accountancy Act model that adds a second path: a bachelor's degree at 120 credit hours plus two years of supervised professional experience, instead of 150 hours plus one year of experience, according to CFO Dive .
About 43 states had adopted this 120-hour alternative or otherwise changed their rules by 2025 and 2026, per the same reporting. The tradeoff is time in a different form: instead of a fifth year of school, you complete a second year of supervised work experience before you qualify for the license. New York remains on the traditional 150-hour standard with no plan to add the alternative, and will apply stricter course requirements within those 150 hours starting August 1, 2027.
Rules and effective dates vary by state, and mobility rules that let a CPA licensed in one state practice in another depend on which pathway you complete. Confirm current requirements directly with the NASBA licensure pathways page or your state board before you commit to a plan.
Weighing a fifth year against a second year of experience
The 150-hour and 120-hour pathways trade one cost for another. A fifth year of school adds tuition and delays your first full-time salary by a year. The 120-hour alternative gets you into the workforce a year sooner, but adds a second year of lower entry-level pay before you qualify for the license, since employers usually pay unlicensed staff less than newly licensed CPAs. Compare the true cost of an extra year of tuition against a year of reduced early-career pay before you decide which path fits your budget.
Extra credits do not have to come from a four-year university
Community college courses often count toward the 150-hour total, and many students use lower-cost community college credits to fill general elective requirements while saving university tuition for accounting-specific coursework. Confirm with your state board and your university's registrar that any outside credits transfer and count toward your specific state's requirement before you pay for them.
Not every master's degree satisfies state coursework rules
A master's degree does not automatically clear the 150-hour requirement on its own. Many state boards require a minimum number of specific accounting and business credits within your total 150 hours, not just 150 hours of any coursework. An MBA with a light accounting course load, for example, may leave you short on the accounting-specific credits a state requires even though it meets the total hour count. Confirm the exact credit breakdown with your state board before you choose a degree program to fill the gap.
How to plan your fifth year
Look up your state board of accountancy's current credit-hour and coursework requirements, since they differ from the national model in some states.
Decide between an MAcc, an MBA, or extra undergraduate credits based on cost, time, and whether you want the deeper accounting content a MAcc provides.
If your state offers the 120-hour alternative, weigh a fifth year of school against a second year of entry-level work experience, since both routes lead to the same license.
Talk with your university's accounting advisor early. Many schools build five-year MAcc tracks specifically around the 150-hour rule, and enrolling as an undergraduate makes the extra year cheaper than adding it later.