As suggested, I started over completely from scratch with my return. It was more work than I thought. I did not import from last year’s return. I did import 1099-INT and 1099-DIV from a brokerage firm. I manually entered foreign tax credit (FTC) carryovers from prior years as regular FTC, and left AMTFTC empty because all years are zero.
I entered the foreign tax credit income for the RICs in Step-by-Step. Then I got to the page titled “Simplified Limitation Election for AMT” that is incorrect. That page says: “We’ve reported interest, dividends, and K-1 entries from each country. Because you’re subject to the alternative minimum tax (AMT), we need to know how you want to handle your foreign tax credit.” I stopped with Step-by-Step at this point because I am not subject to AMT. Why should I blindly elect now?
There is no AMT Form 6251 in the list of forms currently being used by the program for my return. But I opened 6251 as an additional form to see if something was incorrect. The AMT is zero. The “Simplified Foreign Tax Credit Election Smart Worksheet” has no boxes selected, but that is probably because I stopped Step-by-Step before committing to anything.
The Form 1116 Comp Wks was only missing whether the dividends were Paid or Accrued and the Date. I marked Paid and RIC respectively on the Worksheet. Within the Form 1116 Comp Wks, the “Form 1116, Line 18, Adjustment Exception Smart Worksheet” has the Qualifies for the Exception box selected. This is not the same as simplification.
If the “Subject to AMT” is a program bug, it appears to me that as long as I do not have to file a Form 6251 and AMTFTC, the simplification election is not applicable. My understanding is that the IRS would have to see simplification used on the AMTFTC form to signify that election. So if I skip over the foreign tax credit section of Step-by-Step and go directly to the Forms, this seems to me to be a valid workaround unless the program classifies my action as an error needing correction. Comments?
