Kentucky Passes CPA Alternative Pathway: One Less Holdout

If you read our article last year on CPA licensure reform, you may remember that Kentucky was on the holdout list. Seven states were still clinging to the traditional 150-hour model with no alternative pathway in sight. Kentucky was one of them. Not anymore.

On April 3rd, Kentucky Governor Andy Beshear signed House Bill 45 into law, creating an alternative route to CPA licensure that takes effect July 16, 2026. The new pathway allows candidates to qualify for the CPA exam with a bachelor’s degree (120 credit hours) and two years of relevant CPA-verified work experience. As is the case in all states, the CPA exam is still required. Rigorous licensing standards remain intact, and the Kentucky Board of Accountancy retains full oversight. The change simply removes a barrier that the industry believes was keeping qualified people out of the profession.

A Self-Inflicted Shortage

The 150-hour rule has been a fixture of CPA licensure since the 1980s. The reasoning was sound at the time: raise the bar, elevate the profession, ensure rigor. What nobody anticipated was that the requirement would eventually become one of the primary reasons the profession is running short of people.

For a profession centered around math, things just didn’t add up. An extra year of school costs time, money, and opportunity. For students without financial support or career-changers who already hold a degree and real-world skills, the 150-hour rule functions less like a quality filter and more like a gate that rewards those with resources. The profession has been paying that price in the form of declining accounting majors, CPA exam candidates, shrinking pipelines, and escalating competition for qualified staff for more than a decade.

Though the issue was evident, the AICPA, NASBA, and state societies moved slowly until 2025. Now, forty-plus states recognized the issue and acted. Kentucky was one of the last states to take action. That is no longer the case.

Two Paths, Same Standard

The Kentucky House Bill 45 preserves the traditional 150-hour pathway while also adding a second option: a bachelor’s degree plus two years of relevant, CPA-verified work experience. Candidates pursuing either route must still pass the CPA exam and meet all requirements set by the Kentucky Board of Accountancy.

The bill was supported by the Kentucky Society of CPAs. KyCPA CEO and President Darlene Zibart described HB45 as a thoughtful and proactive response to the evolving needs of the accounting profession, noting that expanding access while maintaining high standards strengthens the CPA pipeline for the long term.

The legislation also addresses practice mobility. CPAs licensed in states with equivalent requirements can now practice in Kentucky without obtaining a separate state license, aligning Kentucky with the broader national framework that most states have already adopted.

The Landscape Has Shifted

The pace of reform since last year has exceeded most projections. States that were listed as having active legislation at the time have since signed their bills into law. States not yet on the radar have also acted. And of the original seven holdouts, four have crossed the finish line. Here is where every state that has moved since the previous article stands as of May 2026.

Signed into law

• Alabama — Gov. Kay Ivey signed HB 59 on January 30, 2026.
• Arizona — Gov. Katie Hobbs signed SB 1181 on April 7, 2026.
• Arkansas — Gov. Sarah Huckabee Sanders signed a Board of Accountancy rule change on November 10, 2025. Additional rules changes were approved by the Arkansas Legislative Council on February 23, 2026.
• California — Gov. Gavin Newsom signed AB 1175 on October 3, 2025.
• Colorado — Gov. Jared Polis signed SB 26-076 on May 4, 2026.
• Idaho — Gov. Brad Little signed HB 563 on March 18, 2026. New pathways take effect July 1, 2026.
• Kansas — Gov. Laura Kelly signed HB 2573 on April 9, 2026.
• Kentucky — Gov. Andy Beshear signed HB 45 on April 3, 2026. New pathways take effect July 16, 2026.
• Mississippi — Gov. Tate Reeves signed HB 1137 on March 13, 2026.
• Nebraska — Gov. Jim Pillen signed LB 718 on February 25, 2026.
• New Hampshire — Gov. Kelly Ayotte signed HB 1259 on April 22, 2026.
• New Jersey — Gov. Phil Murphy signed Bill A5598 on January 12, 2026.
• New York — Gov. Kathy Hochul signed AB 7613 on November 21, 2025.
• Oklahoma — Gov. Kevin Stitt signed HB 4317 on May 6, 2026.
• Puerto Rico — Gov. Jenniffer González Colón signed Ley 174-2025 on December 19, 2025.
• South Dakota — Gov. Larry Rhoden signed HB 1035 on March 2, 2026.
• Washington — The Washington State Board of Accountancy adopted two new pathways via rule change on October 17, 2025.
• West Virginia — Gov. Patrick Morrisey signed HB 4088 on March 2, 2026.
• Wisconsin — Gov. Tony Evers signed AB 696 on April 2, 2026.

Awaiting the governor’s signature

• Missouri — SB 1233 has passed both chambers and now awaits Gov. Mike Kehoe’s signature.

Legislation in progress

• Louisiana — HB 548 passed the House and is currently in the Senate.
• Massachusetts — S.2946 passed the state Senate and awaits review of the Joint Committee on Consumer Protection and Professional Licensure.
• Michigan — HB 4893 passed the House and is currently in review by the Regulatory Affairs Committee.
• Vermont — H.588 passed the House and now sits with the Senate.

Legislation planned

• Maine — The Maine Society of CPAs plans to submit legislation in December 2026.
• North Dakota — The North Dakota CPA Society plans to pursue legislation in 2027.
• Wyoming — The Wyoming Society of CPAs intends to introduce legislation in 2027.

A Wider Door

The legislation does not lower the bar. The experience requirement is specifically designed to ensure that candidates without the additional coursework demonstrate competency through verified professional work. What it does is widen the door to people who were categorically excluded not because they lacked ability, but because they lacked the time or money for an extra semester of school.

For firms, the practical effect is a broader talent pool, a more accessible path for career-changers, and alignment with the national mobility framework that has become standard in most other states. The firms that recognize this shift as a structural change rather than a headline will be better positioned to take advantage of what it actually opens up.

For more on how licensure reform is reshaping firm recruiting and growth strategy, read How State CPA Licensure Changes May Reshape Your Firm’s Future.