ERC refund

[tara211]

Below is the message I received from your support, which doesn't make sense. When balance sheet is not balanced, we don't plug number, we should look for the cause of it. ERC Refund was entered under Salaries and Wages, less employment credits. however the ERC amount shows up in Schedule M-1 and M-2 and causes retained earnings makes balance out of balance. 

Hello Torbati 

The balance sheet is off by the exact amount of the ERC entered. The only way to clear the diagnostic, is by fixing the balance sheet. This is not an issue within the Lacerte program. 

To clear the diagnostic, you can enter the amount of ERC in one of the liability fields to make the ending liabilities and assets equal. We cannot tell you which liability field to put it in because that goes against our policies. We can only offer technical support. We cannot offer tax advice. 

This is the only way to make that diagnostic go away. Lines 15 and 27 (ending assets and ending liabilities) do not match up, which means the balance sheet (schedule L) is not equal (balanced). Refer to page 4 of the 1120S. 

[qbteachmt]

This is not Support but we often try to be helpful. I found this:

We do offer an informational diagnostic in both the Partnership and Scorproation tax types that advise we are making this M-1 adjustment. This diagnostic will jump back to the balance sheet miscellaneous screen. We added an override labeled Schedule M-1 adjustments for refundable employment tax return credits: 1=yes, 2=no [O]. As this is an override we can also change the default. In options on the Tax Return tab under Federal Tax Options there is a similar heading. If we change the option to no it will default all returns to not include the adjustment and no override would be needed.

[tara211]

I have tried all said M-1 adjustment override in both miscellaneous screen and federal tax option screen. still M-1 and M-2 causes my balance sheet by off by amount of ERC.

[harveyburger]

The balance sheet retained earnings does not agree with the M-2 for an S Corporation for the retained earnings.

The beginning AAA account on page 5 M-2 line 1 agrees with the beginning retained earnings on the balance sheet.  I have reviewed every line of the M-2 with a Lacerte agent on the line and all the figures agree to the tax return.  However, the ending balance of the M-2 does not agree with the ending retained earnings on the balance sheet. 

All of the individual items on the balance sheet have been verified.  All of the assets have been verified as well as all of the liabilities and the additional capital have been verified to the accounting figures which balance in total.

Any helpful ideas would be appreciated.

Thanks