[Moved into a new thread from: [How do I track and carry forward unused foreign tax credits?] --admin LadyGeek]
I am new to this forum and to FTC's. In 2021 I paid foreign taxes after unlocking a pension plan from abroad. The accountant completed Form 1116. However, because of a problem on our account that left an erroneous unpaid balance dating more than 10 years (working with an IRS advocate on this), we choose not to file 2021 because we were owed a substantial refund, which we didn't want applied to that unpaid balance which is not ours. Because the accountant and ourselves were new to Form 1116 and we didn't file 2021 (though the taxes are done), we also did not file an amended 1040X for 2020 to carryback the unused portion of the FTC.
From what I understand you must carryback 1st. Also, you can only carry back if there was foreign tax incurred. Is this accurate? Also, I read that you only have 1 year from the end of the year in which the foreign tax was incurred to apply for the amendment. It seems that because that year passed and because we didn't have foreign income in 2020, we would lose the excess FTC. Is this accurate?