I have large foreign tax paid for year 2023. It is high percent of overall income. But, similar percent doesn't seem to be used while doing FTC calculation. It was done right for tax year 2022.
It depends. The calculation of the foreign tax credit is done on a Form 1116 worksheet. Since you are using Turbo Tax online, you will need to pay for the program to look at all forms, including the worksheet. Once you have it, you can compare it with your 2022 Form 1116 worksheet to see if the calculation makes sense.
According to the IRS, Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources.
If there is a difference this year, it may because your US liability changed from last year. You can verify this by looking at line 16 on your1040 form in both your 2022 and 2023 return. Also your foreign and domestic income may have changed thus changing the fractional values I mentioned.
Any foreign tax credit that cannot be claimed this year can be carried back by amending your 2022 return or carryforward for ten years.