@Amberwaves95
Create an 'Other income' account called 'Employee Retention Credit'. When you receive the credit, record a deposit and assign that account to the deposit. That's it. You do not want to record it as @Giovann_G suggested because, if you do, you would be reducing your expenses in the current period. You want to record it as income.
As a side note, the payroll expenses used for the ERC become a disallowed deduction once you receive the ERC and you will need to file amended tax returns for the year in which the payroll expenses were used to claim the credit.
