If you qualify for the exemption but have carryovers, TT by default will not use the exemption. If after the calculations the credit on form 1116 line 35 is less than the exemption, you can elect to use the exemption in lieu of the calculation.
To do this, in Forms Mode, bring up the form 1116 worksheet. Scroll down to the header "Foreign Tax Credit Carryovers". At the bottom of the box for "Carryovers from 2021” in the cell to the right of "Carryover to 2022", put the pointer over the cell and right click. On the popup box select click on "Override" and delete the entry. After that the cell will be yellow and blank. Now if you check form 1116 line 35, it will now display the exemption amount and to the left will be the statement "Do Not File Form." You are done.
