You can get a deduction for the gross wage amount ($100,000) , as that is what you paid the employees. The issue is whether you report it as wage expense for $100,000 or you classify the deduction as employee benefit programs (line 18 on form 1120-S or line 19 on form 1065) for $5,000 and wage expense of $95,000. The advantage of listing the wages as $95,000 is that the IRS may compare that number to your W-3 form and if the two numbers don't match it may represent a red flag that could open your reporting up to more scrutiny.
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