Form 1116, line 3b and 3a are dollar amounts and if there is a dollar amount, an explanation is needed. Here is the information:
Some deductions on your return may not definitely relate either to your foreign income on line 1 or your U.S. source income. Some examples of these deductions might be medical expenses that you deducted on Schedule A, line 4, or alimony that you paid and deducted on Schedule 1 (Form 1040), line 18a. These types of deductions need to be entered on lines 3a or 3b on the Foreign Tax Credit Computation Worksheet.
If you don't itemize your deductions, your standard deduction will automatically be brought to Form 1116.
See About Form 1116, Foreign Tax Credit which states: Line 3b.
Enter on line 3b any other deductions that don't definitely relate to any specific type of income (for example, the deduction for alimony paid from Schedule 1 (Form 1040), line 19a).
I am also puzzled as to where the amount on line 3b on form 1116 comes from. Can you advise me please where to search for it on other forms? I can't find a match anywhere and I need to add an explanatory statement.
Thanks!
Lines 3a and 3b
Some deductions don't definitely relate to either your foreign source income or your U.S. source income. Enter on lines 3a and 3b any deductions (other than interest expense) that:
• Aren't shown on line 2, and
• Aren't definitely related to your U.S. source income. Line 3a. Enter the following itemized deductions (from Schedule A (Form 1040)) on line 3a.
• Medical expenses (line 4).
• General sales taxes (line 5a). Instructions for Form 1116 (2022) -17-
• Real estate taxes for your home (line 5b).
If you don't itemize deductions, enter your standard deduction on line 3a. Line 3b. Enter on line 3b any other deductions that don't definitely relate to any specific type of income (for example, the deduction for alimony paid from Schedule 1 (Form 1040), line 19a).
@Perlwinkle65
I agree with original poster - I have on idea where this amount came from and turbotax wants an explanatory statement for it. I'm claiming a standard deduction. I don't have anything like alimony. The foreign tax credit carryover adds up to all the foreign tax I paid so it's not a part of that.
The amount is small - I may just change it to 0 as I can't explain it, and it's April 18.
ChatGPT gave this answer - informative but not conclusively helpful:
Line 3b of the Foreign Tax Computation Worksheet is used to report foreign taxes that are not eligible for the foreign tax credit. The amount reported on this line is typically the foreign taxes paid or accrued that do not qualify for the foreign tax credit, such as foreign taxes on income that is excluded from U.S. taxation or foreign taxes that are considered a deductible expense for U.S. tax purposes.
The amount reported on line 3b of the Foreign Tax Computation Worksheet may be carried forward to other forms or worksheets in the tax return as appropriate.
It turns out I can't even figure out how to change it to 0 - none of the 5 or 6 places where it occurs allow me to edit it in form view. Will have to work harder to figure out where it came from or hope someone replies to this soon :).
This is a known issue and you can sign up for updates on it's resolution here: Why is the Foreign Tax Credit including my personal property tax in the deduction calculation?
I have the same problem in Turbotax 2023 mac desktop. There's an "other deduction" less than $50 that I cannot figure out where it came from, and it's forcing me to come up with an explanation. Is this a bug?
No, you have money in your return causing the explanation field. It could be a medical expense or alimony or other things. Since you are on mac desktop, go to Forms mode, select the form 1116 line explanation error. Select your tax data button to see where the money is coming from.
I have this same problem. The value is $3. I have tried what you recommended, but can find no value 3. The Explanation Statement says the following "Other deduction Statement A. Balance of deductions from income not claimed as definitely related on Line 2" . I am rather at a loss about what to do next.
I am having the same problem. I'm getting $29 on 1116, line 3a (5) Other Remaining itemized deduction. I can't see anything on Schedule A in that amount. I tried overriding it to zero but it still is giving an error wanting an explanation statement. Should I put "TurboTax error"?