Unused credit may be carried forward for five years
What the document says“No credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose.”
The section lets credit above the limit in section 26(a), reduced by other credits allowable under the subpart other than sections 25F, 23 and 25D, be carried to the next taxable year and added to the credit for that year, but not past the fifth taxable year after the year the credit arose, with credits treated as used first in first out.
What the document actually says“No credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose.”
Unused credit may not be carried past a point. That point is the fifth tax year after it arose.
Credit that cannot be used at once rolls forward. It is used oldest first. After five years the rest is lost.
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