Foreign Tax Credit vs Deduction - Software will not update

Forum|Forum|5 months ago
March 28, 2026
1 reply
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I had my Foreign Tax Paid amount as an itemized deduction, and out of curiosity, I let the software change it to a credit to compare the different between the deduction vs the credit. Now the program has it recorded as a credit and I can not find a way to change it back to a deduction. Is this a software glitch?

Mike9241

Level 15

there are two ways to be able to indicate take it as a credit. 1) by using the 1099 and linking to form 1116 or 2) entering the info through the 1116, for 1) go back to the 1099 and indicate you want to take it as a deduction or 2) delete form 1116

It's rare that the deduction is better than the credit. You must have more in itemized deductions than the standard deduction. It can happen if your marginal tax rate (the effect of taking a deduction) is higher than your average tax rate (the effect of taking it as a credit). As a deduction, you lose whatever would have been a carryover if taking the credit. Then again, most times the carryover or carryback is never useful.

Mike9241