Have a larger restaurant that has 70 employees as defined by the calculations from the 2019 payroll data, so small employer rules for the Employer Retention Credit (ERC).  I believe the 2020 Qualified Wages for the credit is:

Qualified Wages = Wages + Tips - payroll from 1/1/20 thru 3/11/20 - wages used for PPP loan forgiveness

Qualified Wages/70(for this employer) = wage per employee.  In this case, they will not hit the max $10,000 per employee but not far from it.  Call this Qualified Wage per Employee (QWE).

Do I need to subtract the tips from Qualified Wages if the S-Corp is passing along the credit for Social Security and Medicare Tips (call this credit SSMT) to the shareholders (changing the Qualified Wages amount) or will the SSMT credit be subtracted from the Employee Retention Credit in the 941-X?   If the former, it will change Qualified Wages used to determine the ERC which can not be used as a deduction in the S-Corp return. S-Corp on extension but time running out.

Thanks in advance!