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Accounting for the Employee Retention Credit and the Pass-Through Entity Tax

Exam Questions: 10
Course Level: Basic
Pages: 62 | Content: 54, Supplemental: 8
NASBA Area of Study: Accounting
Not Acceptable for: Enrolled Agents
Version: 8070

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 2020 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, and more. PLEASE NOTE: Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic.

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Course Information

Table of Contents
  • Accounting - Financial Disclosures for the Employee Retention Credit (ERC)
  • Accounting - Financial Disclosures for the Pass-Through Entity (PTE) Tax
Objectives
  • To recognize the type of expense that is the basis for measuring the amount of the Employee Retention Credit (ERC)
  • To identify where to present the ERC in the statement of income using the ASC 958 conditional contribution model
  • To recognize where to present the ERC in the statement of income using the IAS 20 grant model
  • To identify an action step to be taken to correct the previous presentation and disclosure of an ERC in the 2020 statement of income
  • To recognize the proper presentation of the ERC in a tax-basis statement of income
  • To recognize a technique that has been attempted to circumvent the SALT deduction limitation
  • To identify how to account for the PTE tax in an entity's financial statements
  • To recognize the requirements for recording deferred state income taxes with respect to the PTE tax election
  • To identify disclosures that should be made for the PTE tax election

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