Ridiculous issue with reporting foreign tax credit sources

Forum|Forum|4 months ago
March 1, 2026
1 reply
461 views

There is a bug with reporting foreign dividend income for foreign tax credit on TurboTax 2025, that appears to have not been thought through at all.

When importing 1099-DIV files, we will get a chance to specify where the foreign dividends came from. However, you have only the choice of picking mutual fund/RIC, or "other source" with a single drop-down menu. At this step, this locks each 1099-DIV to *only a single source of foreign dividends*.

Then, when doing the deduction and credits, for foreign taxes credit, now you get to specify multiple countries plus RIC. However, when specify the amount for each country in the next step, each 1099-DIV can only be mapped to one country. Remember only one source can be chosen when importing 1099-DIV? That now comes back hit this right in the face.

Using my own example, I have a robo-advisor with Vanguard and another brokerage with bunch of foreign dividend stocks, plus VYMI. For that Vanguard 1099-DIV, it's a single RIC source since it's all ETFs. For my other brokerage, however, I have foreign dividends from an ETF, but also from UK and Canada as well. Ideally, I should report some portion from both accounts to RIC, and my other brokerage under UK and Canada. However, the program forces me to report all dividends from this brokerage under a single source, at this point I am forced to pick "various", despite the fact that I know and able to report actual amounts from RIC, UK and Canada for this account.

The irony being that the program itself says you should specify, but it itself is what's preventing me to do so.

DaveF1006

Level 15

Instead of having one large 1099-DIV for your brokerage, you can create multiple "1099 DIV's that add up to the original total. This allows you to assign a specific country to each portion of the income.

Edit your original imported 1099-DIV: Change the name to something like "Brokerage Name - US Source".
Reduce the amounts in Box 1a and 1b so they only represent your U.S.-sourced dividends.
Delete the amount in Box 7 (Foreign Tax Paid).

Now create "Dummy" 1099-DIVs for each country:

In the first 1099 DIV, enter only the Canada dividends in 1a/1b and the Canada tax in Box 7.
Do the same for the UK. Enter only the UK dividends and tax.
For the RIC 1099 DIV, the portion from your ETFs/Mutual Funds and tax.

After you enter these as separate forms, your total dividends on Schedule B will be the same as your original statement. However, when you go to the Foreign Tax Credit section, you will see three distinct "Forms" that can each be mapped to their correct respective country.

To help determine the amount of dividends for each country, you would need to look at your disclosure statements to determine the amount of dividends and tax for each country.

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