Accounting and Financial Disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax (Course Id 1939)

• Who is this course for?
  This course is designed for CPAs, accountants, and financial reporting professionals who need to understand the proper accounting treatment and disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax.

• What is this course about or what problem does this course solve?
  It provides guidance on GAAP and tax-basis accounting for the ERC and PTE Tax, compares ASC 958 and IAS 20 models for ERC reporting, explains disclosure requirements, and addresses common presentation and compliance issues.

• How can the knowledge from this course be used?
  Learners can apply the course concepts to accurately record, present, and disclose ERC and PTE Tax transactions in financial statements, ensuring compliance with FASB standards and IRS requirements.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  Proper handling of ERC and PTE Tax reporting is essential to avoid financial misstatements, meet audit requirements, and comply with evolving tax laws and accounting standards.

• When is this course relevant or timely?
  It is especially timely in light of ongoing ERC claims, IRS withdrawal programs for dubious claims, and recent legislative changes affecting PTE tax elections.

• How is a course like this consumed or used?
  Delivered as a NASBA QAS-approved self-study text course, it includes review questions and a final exam, allowing participants to complete it at their own pace for CPE credit.

The objective of this course is to review the accounting and financial disclosures related to two recent changes from legislation: the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax.

Topics include: An overview of the ERC rules; models to use to account for the ERC;  comparing use of the ASC 958 model with the IAS 20 model to account for the ERC;  disclosures required for the ERC including disclosures found in newly issued ASU 2021-10;  fixing 2021 ERC presentation and disclosure errors; presenting the ERC on tax-basis financial statements; overview of the Pass-Through Entity (PTE) Tax election;  GAAP accounting for the PTE tax;  GAAP disclosures for the PTE tax;  presenting the PTE tax on tax-basis financial statements, dealing with ERC withdrawals and filings in  2024 and 2025, and more.

NASBA QAS - Text - NASBA Registry - 1939

Course Learning Objectives

• Recognize the type of expense that is the basis for measuring the amount of the Employee Retention Credit (ERC).
• Identify where to present the ERC in the statement of income using the ASC 958 conditional contribution model.
• Recognize where to present the ERC in the statement of income using the IAS 20 grant model.
• Recognize the proper presentation of the ERC in a tax-basis statement of income.
• Identify how to account for an ERC filing in 2023.
• Recognize a technique that has been attempted to circumvent the SALT deduction limitation.
• Identify how to account for the PTE tax in an entity’s financial statements.
• Recognize the requirements for recording deferred state income taxes with respect to the PTE tax election.
• Identify disclosures that should be made for the PTE tax election.

Chapter 1 - Accounting and Financial Disclosures for the Employee Retention Credit (ERC) and the Pass-Through Entity (PTE) Tax

I.  Introduction

II. Accounting -Financial Disclosures for the Employee Retention Credit (ERC)

A. Overview

B. GAAP Accounting for the ERC

C. OPTION 1: ASC 958-605- Not-for-Profit Entities: Revenue Recognition

D. OPTION 2: IAS 20, Accounting for Government Grants and Disclosure of Government Assistance

E. Disclosures for the ERC

F. Tax-Basis Financial Statements and the ERC

G. Filing for the ERC Prior to April 2025 ERC Deadline

H. Accounting for Dubious ERC Claims- IRS Withdrawal Programs

Review Questions

III. Accounting - Financial Disclosures for the Pass-Through Entity (PTE) Tax

A. Overview

B. Use of the Pass-Through Entity (PTE) Tax Election

C. GAAP Accounting and Disclosures- PTE Tax

D. GAAP Accounting Rules for the PTE Tax

E. GAAP Disclosures for the PTE Tax

Review Questions

Glossary