If you have no more than $300 in foreign tax if you are single or no more than $600 foreign tax if you are married, you do not need to complete Form 1116.
Exemption from the Foreign Tax Credit Limit
You will not be subject to the foreign tax credit limit and will be able to claim the foreign tax credit without using Form 1116 if all of the following requirements are met.
- Your only foreign source gross income for the tax year is passive income, as defined in Publication 514 under Separate Limit Income.
- Your qualified foreign taxes for the tax year are not more than $300 ($600 if filing a joint return).
- All of your gross foreign income and the foreign taxes are reported to you on a payee statement (such as a Form 1099-DIV or 1099-INT).
- You elect this procedure for the tax year.
IRS Foreign Tax Credit How to Figure the Credit
You should see the amount on Schedule 3 , line 1.
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