It appears that the TurboTax system does not automatically apply the foreign tax credit to the portion of the foreign earned income above the exclusion. It has to be done manually. AND it has to be done in the desktop program version of TurboTax.
Once you download the program you will need to enter all of your foreign income and then your foreign income tax exclusion information just as you already did (if you did it in the online program here's how to transfer it to the desktop).
Now click on the 'Forms' button on the upper right. This will allow you to edit directly on the forms. Scroll down and find the 'Foreign Tax Credit Computation Worksheet' which is abbreviated '1116 Comp Wks'. Click on that form and scroll down to 'Foreign Taxes Paid/Accrued'.
The date should already be filled in for you and the 'Paid' box is already checked. The system just hasn't calculated the deductible amount. You will need to work out the percentage of your income that is above the $112,000 exclusion and then work out that percentage of the taxes that you paid. Enter it under 'Other' on the line for Country A and the system will apply it to your taxes due.
@Hua
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