Thanks for your replies. Do you think this is a bug, I think there is an issue with the 1116 worksheet itself. I've noticed this issue after the latest update, before the update I was able to leave Part 2 all blank, including the boxes unchecked and I was ready to file the Form 1116 and deduct the credit. I'm still not sure if the passive income carryover cannot be applied even if foreign tax was not paid in 2020. My old CPA warned me about complicity and issues with foreign tax credits. To be honest, I still could leave Part 2 blank and check one of those boxes and then E File, it should not affect my taxes. I think Intuit should investigate this.
