You are correct, the employee retention credit (ERC) is not taxable income in the year you receive it. So, you don't enter it on Form 1120 as such. It would appear on the return if you need to file schedule M-1 which reconciles your book income to your tax income. To do that, you would make an entry in the Book/Return Income(Loss) Reconciliation Wks on line 7(i) for the amount of the ERC:
Also, you need to amend tax returns for the years from which the ERC was generated, to reduce your payroll expense in those years by the amount of the ERC. This may result in taxes due for those years. You may find this article helpful: Employee retention credit