No, you should not reduce wages, as the Employee Retention Tax Credit (ERTC) reduces payroll tax payments (not wages). The wages you report on Form 1120S Lines 7 & 8 should match your W-3.
Further, the ERTC was actually claimed on the company's Form 941 quarterly payroll tax reports as a credit for employer taxes. You should report the actual taxes paid during the tax year on Line 12, which should match your 941's for the year.
The credit taken is reported to the shareholders on Schedule K1, Line 13g (Code P Other Credits).
For more info, see Reporting CARES Act Employee Retention Credit on Form 1120-S
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