arandersen
Level 3

I agree.  I found the below-referenced article on Bloomberg from a Google search.  It describes how Code section 280C supports the position that if the credit is for the 2020 year, even cash basis taxpayers must reduce the wages in 2020:

https://news.bloombergtax.com/daily-tax-report/when-is-the-amount-of-the-employee-retention-credit-s...

Quote from the above article:

"Further, section 280C provides in relevant part that no deduction is allowed for wages “paid or incurred for the taxable year” in which the credit is “determined for the taxable year.” This suggests that expense disallowance occurs in 2020, and is consistent with the IRS position regarding section 280C more generally. See, e.g., Treas. Reg. Section 1.280C-1 (expense reduction occurs in the year the credit is “earned”). Thus, regardless of whether a cash-basis taxpayer claims the 2020 ERC in 2020 or 2021, expense disallowance likely occurs in 2020."