I don't disagree that the wage expense should be reduced by the credit.  My issue remains with my NI per books on line 1 of the M1.  The books show actual wages paid and then other income to recognize the credit (net result is a reduced expense).  When I enter actual wage paid and then Lacertes input field for sick and family leave credit it does not increase my net income (like normal "other income"), it only creates an M1 adjustment with no retained earnings impact. 

@aeh-cpa - I don't think the refund would effect your situation because it would show as balance sheet overpayment, right? The nuts and bolts and impact to your wage expense has already occurred.