You have two options. You can enter the German form in order to take the foreign earned income exclusion. Or you can enter the 1099 and then enter the foreign taxes paid and take a foreign tax deduction. Either should result in a zero dollar tax return.
I would enter the 1099 and then the foreign taxes, personally. The IRS received a copy of the 1099 so it is best to enter that form on your return.
Foreign taxes are entered in your federal return under 'Deductions and Credits'. Scroll down to 'Estimates and Other Taxes Paid' and click on 'Foreign Taxes'. Enter what you paid to Germany here. That should solve the problem.
@Ephe
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