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I can answer this part: "should this credit that my client had back in 2016 but couldnt use, is it supposed to carryover"
As I understood it while working on my own taxes, yes, the unused credit carries on, since that is a Lifetime limit. Tracking this is similar to Form 8606. The math doesn't kick in unless you have another improvement/need for the credit and still haven't hit the limit (doors vs windows) and the regulation applies to that tax year. It's nonrefundable, so you can only use it by carry forward.
For instance, I am carrying forward an available amount from putting in a new slider a couple of years ago. It was only 1, and we did not hit the lifetime limit of $500 at that time, and I saw the credit balance is being carried forward on the worksheet.
https://www.irs.gov/instructions/i5695
Jump to
Lifetime Limitation Worksheet—Line 18
"Level Up" is a gaming function, not a real life function.
