Form 1116 - completing it a problem

[MayaD]

Do you have a specific question regarding form 1116?

Where do I enter the foreign tax credit (Form 1116 ...

[bknc]

Hi, I've read that you don't have to complete form 1116 if the amount of foreign taxes paid is under $300, but TurboTax Premier keeps prompting me to fill it out. 

[DeanM15]

If your foreign taxes are under $300 ($600 for Married Filing Jointly) you have met one of the requirements for taking the credit without filing Form 1116. TurboTax generally must ask a series of questions to determine you are not eligible. 

"You may be able to claim the foreign tax credit without filing Form 1116. This election is available only if you meet all of the following conditions.

• All of your foreign source gross income was "passive category income" (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for High-taxed income described later, and (b) certain export financing interest.

• All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-1 (Form 1065), Schedule K-1 (Form 1120-S), or similar substitute statements.

• Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return)."

[sandymc]

Yes, I know I meet the requirements for the election to claim the credit without filing 1116, but Turbotax keeps preparing it anyway.  Any way to get it to quit?  Only have $7 of foreign tax and it is reported on a 1099-div.  Why it is doing this? All passive.  How to make it quit?

[DaveF1006]

More than likely this is an entry recorded from a 1099-DIV. If you don't wish to claim this, go to Box 8 of the 1099-DIV entry and remove it. If it is reported elsewhere, you can go to the section of your return and delete it from the form.

[euntiedt6]

Turbo tax for 2020 has a software problem that doesn’t allow you to file electronically if you are taking a foreign tax credit and filling form 1116.  Tried several times, deleted the form and re-entered it, spent nearly 2 hours on the phone with customer service and no one there is able to fix the problem!

[LinaJ2020]

As of today, form 1116 is available for both e-file and paper-file.  You can try to file it again or delete it first before re-enter. 

If you are using the online version,  

1. Open your return, if it's not already open.
2. In the upper right corner, click My Account > Tools.
3. In the pop-up window, select Delete a form.
4. Click Delete next to Form 1116 and follow the instructions to remove the form/schedule.

For year 2020, the amount would be shown on Schedule 3 line 1 and line 20 on Form 1040.  

[lucymeadow]

My return continues to be rejected. The reason says to check Foreign Tax source and then on a subsequent rejection it say check date. I've researched on line and found that it's an IRS issue. Other software providers claim to be working on some kind of fix. Has TT software engineers applied the patch or Fix? Last week I deleted 1116 still didn't take Please help I don't want to file by mail due to the size of my refund is over $20,000

[DaveF1006]

it depends. What I have been able to see is that there are no known issues to this. Try deleting the income and delete the 1116 from your forms and reenter the information if not updated. 

1. go to tax tools>tools delete a form>delete 1116
2. If in the software, go to the forms mode and scroll down the list of forms until you see the 1116. Select it and then delete it at the bottom of the form.

[Jaytp]

I tried this, deleted form 1116, and refiles and again got rejected. 

Turbo tax told me to file by mail :-(.

Guess I will do that since they seem to be in no rush to fix the issue.

[MaryM428]

TurboTax is investigating this issue.

Here is a link to get information and updates

[acharliek]

I am having a problem where turbotax is calculating my gross income from all sources as almost double my actual income. I've checked everywhere and can't find any errors. If I delete my 1099 info (stock losses) this error goes away. I reviewed the 1099 information, it's all accurate. I can't figure this out for the life of me. I've spent hours on it. Any help is greatly appreciated.

[tim s2]

Good partial answer. Unfortunately is does not fix turbotax or tell you how to get the program to check if you can claim the tax credit before making you enter all the information for form 1116. There is also lack of information to determine just what data / amounts to enter. For example I have Qualified dividends amounts,  total dividends and income from foreign source obligations provided by a RIC relating to foreign tax and income. Some dividends show taxes paid and some do not.  none provide country of origin.  I did not have this issue with the 2019 version. Since I qualify for filing for the credit without filing form 1116. TurboTax should be fixed to provide a direct election/question to determine if a form 1116 is needed first. my 1099-DIV just shows a small amount of foreign tax paid. Less than the 300 or 600 limitation for claiming the credit without the form 1116.

[mefree]

The problem is that TurboTax does NOT ask you these questions that @DeanM15 referenced and automatically assumes that you don't meet the conditions even if you have under $300/$600 of foreign taxes paid that were reported on 1009s from dividends and interest that were uploaded to TT. This is why @sandymc  had a problem

In reality, they shouldn't even need to ask the questions because they should be able to determine whether you're exempt from completing 1116 at least 99% of the time based on the info you entered and uploaded. Instead, TT simply gives you the choice of completing 1116 or putting the FX taxes paid as an itemized deduction.. Both of these will  typically result in a higher tax bill (possibly the same for some people). This error is inconsistent with their max refund guarantee.