From what I heard from TurboTax the principle to apply is:
- Treat the carryover forms as a schedule to firstly record years where you recorded a foreign tax expense
- Utilize those credits chronologically, ie if you had 10,000 in 2018, and utilized 8,000 in 2018 and 1,000 in 2019 and 1,000 in 2020 - you’ve really just utilized all of the 10,000 from 2018. So update the table to show that
- If you then generate another credit in 2019 of 2,000. Don’t mark that as utilized until you’ve fully utilized the 10,000 in 2018
This makes sense when you realise that your credits last 10 years, so you want to utilize your earliest ones first before starting to utilize your more recent ones. Hence on the carryover worksheet, record them such that you utilize your earliest ones first fully, before utilizing your more recent ones
