How to account for the ERC for financial statement purposes.

Congress passed many programs to keep people employed when companies were dealing with the impacts of COVID.  One of those programs is the Employee Retention Credit (ERC).  The ERC was originally introduced under the CARES Act, but the Consolidated Appropriations Act signed on December 27, 2020 made some amendments to it, that expanded eligibility to more contractors.  The ERC is a fully refundable payroll tax credit for eligible employers up to a maximum of $5,000 for each employee in 2020 or $7,000 per employee per quarter from January to September 2021.

Many contractors have received employee retention credits over the past year and half or are in the process of receiving employee retention credits.

The intent of this whitepaper is to assist contractors with how to account for the ERC for financial statement purposes. Since contractors are for-profit entities there is not any specific guidance that can be looked at to determine how to account for the ERC.

White Paper Committee Members

Reach out to any of our committee members with questions or to clarify the information included.

  • Mark Guillaume, Kreischer Miller (Horsham Township, PA)
  • Robert Berger, Anders CPAs + Advisors (St. Louis, MO)
  • Rhett Ennis, CBIZ Berntson Porter (Bellevue, WA)
  • Bryan Eto, BeachFleischman (Tucson, AZ)
  • Benjamin Sumner, Dannible & McKee (Syracuse, NY)
  • Carl Oliveri, Grassi Advisors & Accountants (Long Island, NY)
  • Kathleen Baldwin, CICPAC (Pensacola, FL)
Download our white paper for assistance with how contractors should account for the ERC for financial statement purposes. As always, reach out to a CICPAC member near you for further guidance.