"What I'm finding is that if I don't use the Lacerte input field but manually adjust the wages myself, everything balances and there is no M-1 adjustment."

Exactly. Enter the Reduced amount, and it flows accordingly. It is not a further Adjustment. It's almost like a direct Rebate.

"We are working through the mechanics of the balance sheet and M-1, M-2 Lacerte is making assumptions on"

Then something else likely is off. This is not treated the same as PPP/EIDL loan forgiveness.