Can I Actually Use Unused Foreign Tax Credits

[laquan]

For tax years 2020 (using TurboTax Premier) and 2022 (Deluxe), I paid foreign tax on income from a mutual fund I own.  However, I did not have taxable income for those two years, and so the foreign tax paid was not taken as a credit or a deduction.  In 2021 (Premier), I paid foreign tax and took the full amount as a foreign tax credit.  I would like to carry forward the 2020 amount and carry back the 2022 amount to an amended 2021 tax return.  The "On Demand Tax Guidance" within the downloaded version of TurboTax 2022 Deluxe states that "you will not carry back any of the foreign tax credit if you elected to claim the FTC without filing Form 1116...All of your unused foreign tax credit from this year will carry forward.  TurboTax handles the carryforward automatically so you don't need to do anything else."  However, in all three years, no Form 1116 was generated by the TurboTax software, and when I completed my 2021 tax return, the unused foreign tax paid in 2020 did not appear in the software.  So, I would like to know:

1. What is meant by "TurboTax handles the carryforward automatically so you don't need to do anything else" given that it did not apply my unused 2020 FTC in my 2021 return?

2. Am I able to carry forward the 2020 foreign tax paid to an amended 2021 return if no Form 1116 was filed with my 2020 return indicating that I have a FTC carryforward?  If so, how do I accomplish this in TurboTax?

3. Am I able to carry back the 2022 foreign tax paid in an amended 2021 return if I have not filed 2022 yet?  If so, how do I accomplish this in TurboTax?

[Mike9241]

Single filers who paid $300 or less in foreign taxes, and married joint filers who paid $600 or less, can omit filing Form 1116. But using the form enables you to carry forward any unused credit balance to future tax years; without filing Form 1116, you give up this carryover tax break

******************

so you'll need to amend 2020 to include the 1116 to show the unused carry forward. no amended return - no carryforward. 2020 amended must be filed by 4/15/2024 unless properly extended.  then you'll need to file 2022 to determine the unused FTC that can be carried back to 2021. finally. amend  2021 to report the 2020 carryforward and 2022 carryback. Don't be surprised if the benefit is small or none at all. if there would have been a carryforward in 2021 if form 1116 was filed that means that any carryforward or carryback will not be used because you have no additional foreign income to increase the utilization - no additional benefit if the original return would have shown the total of foreign taxes paid exceeding the amount allowable.  This is not uncommon. I've seen many cases where the FTC carryover expired unused.  

[laquan]

Thanks for your response.  I think I will not bother with amending my 2020 and 2021 tax returns, which means I will forego the 2020 carryforward and 2022 carryback.  However, since I have not filed 2022 yet, would I be able to fill out Form 1116 to establish the 2022 carryover amount, and then use it as a carryforward in future years if I have enough foreign source income that it can be utilized?  Or does the tax law require that it would have had to be used for carryback first (meaning 2021), and if I chose not to amend the 2021 return, then I cannot use the 2022 amount for carryforward?

If I am not required to use the 2022 carryover as a carryback first, could you please provide more specific guidance as to how I would complete Form 1116 in TurboTax?  Would performing these steps create Form 1116 Schedule B as well?  Thank you.