Candace,
I don't know if your situation is the same, but my daughter had a small foreign tax in 2020, but no tax liability, so she was not able to take a credit. Turbotax nevertheless generated a 1116 worksheet for 2020 (just for the file) for the carryover showing no carryover. This year, Turbotax tried to also throw me into the 1116 worksheet and partial credit. I ran her taxes on TaxAct to get the free additional state, and that did give the full credit. I decided to just start her taxes over on Turbotax , this time NOT importing her 2020 information, just putting her personal information, etc., in by hand. That put me to a screen that verified the IRS language you quoted, and gave her the full credit with no 1116.
Hope this helps.
