mhkdgal
Level 4
03-14-2022
02:13 PM
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On an S-Corp return, I reduced the wages deduction by the amount of the ERTC credit received. Since these wages are now non-deductible expenses, should the amount of wage reduction be a decrease to shareholder basis? Should this amount be a reduction to the AAA account?
Lacerte is automatically carrying the amount of the non-deductible wages to the AAA as an other reduction and to the shareholder basis worksheet as a reduction in basis. I have seen some people saying that this is not correct.
Any help is appreciated and if you have a reference to an IRS Notice that addresses this, that would be helpful.
Thank you!
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