There is not a specific cut off amount for Foreign Tax Credit, but rather a formula for limitation based on your overall income.
You can claim the lesser of 100% of the foreign tax you paid or your Foreign Tax Credit limit.
Your Foreign Tax Credit limit is your foreign income divided by your total income. This figure is multiplied by your federal tax amount to determine the limit.
For example, say your total income is $100,000 and your foreign income is $5625. Your federal tax amount is $18,700.
Foreign income $5,625 / total income $100,000 = .05625
Federal tax $18,700 X .05625 = $1,051.87 is your Foreign Tax Credit limit.
If your foreign tax is all reported on US tax forms and is less than $300, you don't have to file Form 1116 or figure your Foreign Tax Credit limit, but the allowed amount still can't be more than your federal tax on line 18 of Form 1040.
In addition, the foreign tax credit is not refundable, so it can never be more than your federal tax on line 18 of Form 1040.
If your foreign income is passive, you are subject to passive income limits also.
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