pk
Level 15
Level 15

Deductions & credits

@John D m while the reply above is an old thread , it was intended for cases where the foreign tax credit is above the  safe harbor amount ( $300 for single and $600 for joint filers ).  The  foreign income to world income ratio is used to generate allowable  foreign tax credit allocation of the total US taxes  i.e. Foreign Tax credit worksheet, uses the world income to compute the  US taxes  and then allows credit of the US taxes for the  portion contributed by the foreign income thus the credit can never be more than US total tax on world income.

 

Does this answer  your query or did I misunderstand your question/comment ?