Seventy percent of small businesses in the United States currently operate without an accountant. Not because they don't want one — because they can't find one. CPA exam candidates are down 27% over the past decade, roughly 300,000 accountants and auditors left the workforce between 2019 and 2022, and the profession is now short by tens of thousands of new entrants a year against demand. If you've called three firms this year and heard "we're not taking new clients" from all three, you weren't imagining it.
States have finally started responding — not by training more accountants faster, but by rewriting the rule that many people blame for keeping candidates out in the first place: the 150-hour education requirement. Here's what's actually changing, why it happened this fast, and the one wrinkle almost nobody is talking about that could affect who you're allowed to hire.
The rule that's finally cracking
For over two decades, becoming a licensed CPA in the U.S. has meant clearing three hurdles: pass the Uniform CPA Exam, get relevant work experience, and complete 150 semester hours of college credit — roughly a bachelor's degree plus a fifth year of school. That extra year costs candidates real time and real tuition money, and profession-wide research increasingly points to it as one of the biggest reasons fewer people bother starting the CPA track at all.
In 2026, states are dismantling that requirement faster than at any point since it was introduced. Roughly 42 states now have some form of alternative-pathway legislation on the books, either passed or moving through statehouses. The core trade being offered almost everywhere is the same: drop the extra year of school, add an extra year of supervised work experience instead.
States with new pathways already in effect or taking effect in 2026:
- Ohio — bachelor's degree + 2 years of experience, or master's + 1 year (effective January 1, 2026)
- Virginia — bachelor's degree + 2 years of experience (effective January 1, 2026)
- Georgia — bachelor's in accounting + 2 years of experience, or master's in accounting/taxation + 1 year (effective January 1, 2026)
- Utah — bachelor's with an accounting concentration + 2 years, or master's + 1 year (signed into law)
- Iowa — bachelor's degree + 2 years of experience, or master's + 1 year (effective July 1, 2026)
Bills with similar 120-hours-plus-experience frameworks are also moving through California, Florida, Illinois, Indiana, Massachusetts, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Tennessee, and Texas. A handful of states — Wyoming, North Dakota, Maine, Rhode Island, and Michigan among them — haven't moved yet, though several are actively debating bills.
Why this happened all at once
The shortage isn't a temporary blip that a strong hiring season will fix. It's structural, driven by demographics that don't reverse: roughly 75% of practicing CPAs are at or near retirement age, and the exam-candidate pipeline behind them has been shrinking for years. In 2022, fewer people sat for the CPA exam than in any year since 2006. One widely cited estimate puts annual demand at around 124,200 new accounting openings against roughly 55,000 new graduates entering the field — a gap that compounds every year it isn't closed.
Firms have responded by raising fees, turning away smaller clients, and stretching existing staff thinner. If your bookkeeper or CPA has gotten harder to reach, slower to respond, or more expensive to retain over the last two years, you're seeing the shortage show up as a line item.
The wrinkle nobody's pricing in yet: mobility
Here's the part that gets skipped in most coverage of this story, and it directly affects who you're allowed to hire.
For decades, CPA licenses have worked almost like a driver's license: get licensed in one state, and thanks to a framework called "substantial equivalency," you can practice across state lines without re-licensing in each one. That system depends on every state board agreeing on the same baseline — historically, the 150-hour rule was the anchor of that agreement.
Now that states are diverging — some keeping 150 hours, others moving to 120-plus-experience — the industry's own coordinating bodies (the AICPA and NASBA) have acknowledged that a long-standing concern is becoming real in 2026: fractured mobility. Their proposed fix shifts the whole concept away from state-to-state equivalency and toward an individual-based mobility model, where whether a specific CPA can practice in your state depends on that person's own qualifications, not a blanket assumption about their home state's rules.
Practically, if you hire a remote bookkeeper or CPA licensed under a newer 120-hour pathway in one state, don't assume they're automatically cleared to sign off on work or represent you in every other state without checking. This is genuinely in flux through 2026 — ask any out-of-state CPA candidate directly how their license interacts with practice rules in your state before you rely on their signature for something that matters, like an audited financial statement or a state filing.
What this means for your business right now
None of this changes overnight, and it doesn't solve the shortage this year — new pathways still require the same years of experience, just less classroom time. But a few practical implications are worth acting on now:
Expect the talent gap to persist through at least the next two to three years. Even in states with new pathways already in effect, the pipeline of newly licensed CPAs graduating under the shorter track won't meaningfully hit the job market until 2027–2028. If you're planning to bring bookkeeping in-house or hire your first controller, budget for a competitive, slower hiring market in the meantime.
Fees are unlikely to come back down soon. Scarcity pricing tends to be sticky even after supply loosens. If you haven't renegotiated or rebid your accounting relationship in the last year, it's worth checking whether you're still getting a fair rate, but don't expect a return to pre-shortage pricing.
The less your books depend on scarce expert hours, the better you'll weather this. The businesses feeling the most pain right now are the ones whose financial records are a black box that only their (increasingly unavailable) accountant can interpret. If your bookkeeping is clean, current, and understandable without a translator, you reduce how much billable CPA time you need every month — and you make it far easier for a new accountant to pick up your books quickly when you do switch firms, which is happening more often industry-wide as firms shed clients to manage capacity.
That last point is where plain-text accounting earns its keep. When your ledger is a version-controlled, human-readable file instead of a proprietary database only your accountant's software can open, switching accountants — or going without one for a stretch while you wait out the hiring market — doesn't mean starting from scratch or paying someone to reverse-engineer your books.
A short compliance checklist for the next 12 months
- If you're hiring a CPA or bookkeeper licensed in a different state, ask directly whether their license carries full practice privileges in your state under the current mobility rules — don't assume it does by default in 2026.
- If your current accountant is stretched thin, ask now, not during tax season, whether they're taking on new capacity or if you should start budgeting for a new relationship.
- If you're a candidate deciding whether to pursue CPA licensure, check your specific state's pathway status before assuming you need the extra year of school — several states now let you swap it for experience.
- Either way, keep your own books clean and current. The less reconstruction work a new accountant has to do, the cheaper and faster onboarding them becomes.
Keep Your Books Ready for Whoever's Holding the Pen
The accountant shortage means the person managing your books next year might not be the same person managing them today — a new hire, a new firm, or a stretch of doing it yourself while you wait for capacity to open up. Beancount.io keeps your financial records in plain, version-controlled text that any accountant (or you) can read and audit without proprietary software standing in the way. Get started for free and make sure your books are ready for whoever's holding the pen next.