Why do you want to take away a credit your client is eligible for ?

I didn't say I wanted to take away the credit. I was asking why PS didn't automatically adjust the related expense for the amount of the credit, as required by the IRS.

I found out that we have to manually reduce the payroll tax amount on Sch C by the amount of the credit.

It doesn't make sense that PS automatically makes the adjustment for 1065s and 1120S, but not Sch Cs.

Sorry, read your question too fast 😊. Yes you need to reduce wages as amount of credit. Just list it on line 26 as other work credits ( don't use a negative number) 

Your welcome. The reason wages get reduced is tips are included in wages, but tips are paid by customers