First, thank you for your replies.

My question was about ERC and the Lacerte tax program.   In S Corp Lacerte, ERC amount is input in Screen 15 in Salary Wages input area "less employee retention credit claimed on employment tax return" which will reduce wages on the Federal return but not CA return.  Then in screen 30 input no in the section that says "schedule M1 adjustment for refundable employment tax returns."  My solution for CA balance sheet to balance was to input the amount of the ERC in screen 32 M2 area  for state only "amount of other additions to carry to schedule L"

Please don't quote another CPAs website as tax law source.  I could not find anywhere on Cal FTB website where it stated that ERC was taxable income in California.  If you are sure that ERC is taxable income in California, please reference the CA FTB law that states this.  There are plenty of other CPA websites on the internet that state ERC is not taxable income in CA and wages are fully deductible.  

Straight from California FTB website

California does not conform to the new federal employee retention credit or to existing federal general business credit provisions. Wage deductions that were disallowed under federal law as a result of claiming the federal ERC are allowed as a deduction for California.

https://www.ftb.ca.gov/about-ftb/data-reports-plans/Summary-of-Federal-Income-Tax-Changes/index.html