Working overseas, foreign tax carryover for previous years, and this year, and software is not using the full amount of carryover, only this year foreign tax paid, why?

The carryover of foreign tax credit can only be used after you have utilized all of the current year foreign tax credit.

The IRS limits the amount of foreign tax you may claim as a credit. That limit is the total amount of U.S. tax you owe, multiplied by a fraction: your foreign taxable income divided by total taxable income. Thus, if you earn $50,000 from foreign sources, and $100,000 from all sources, your foreign tax credit limit is your U.S. tax multiplied by 1/2.