I have a client who received the ERC. I'm filing an amendment to reduce his wages in the year the ERC related to (he received the $ in 2023 but ERC relates to 2021).  I've updated the 1120S.  He resides in MD where there is a pass through entity tax (PTE) at the entity level.  He has a balance due on the amendment given the reduction in the expense. Assuming he pays it in 2023, will he receive a federal expense for 2023 and also receive a dollar for dollar credit for taxes paid in the 2023 MD return?

I'm mostly just confused on when/how he'll get credit for this additional payment.

Any help is appreciated. Thanks!

Bryce