Amending 1065 for ERC

[david3]

The instructions for entering the ERC for a 1065 is similar to entering in a 1120S - enter the ERC credit on line 8 Salaries and Wages (less employment credits) Smart Worksheet.

The 1120S automatically entered the credit as a M-1 adjustment so that book income didn't change. 

However, that didn't happen when entering on a 1065. I manually made the adjustment on the M-1 as a nondeductible expense. Is this how PS handles the ERC for 1065 or did I do something wrong? Not sure why the 1065 wouldn't work the same as the 1120S and automatically adjust M-1.

PS automatically increases SE earnings on the K-1 line 14A. Should the ERC credit also increase SE earnings and SE tax on the 1040? I can't find anything in my research that addresses the ERC impact to SE tax.

Thank you. 

[sjrcpa]

If the original ordinary income, after deducting wages, was subject to SE tax then the now higher ordinary income is also subject to SE tax.

[david3]

Thank you for clarifying the impact on SE tax.

Regarding the 1065 M-1 question -

I have followed the instructions for entering the ERC information for amending a 1065. However, unlike amending a 1120S, the ERC credit amount didn't automatically appear as an adjustment on the M-1. I had to manually enter the adjustment.

Is there a reason PS isn't treating the ERC adjustment the same? Or am I missing a step somewhere?

Thank you.