First, make sure you qualify for the credit without filing Form 1116.
According to Election To Claim the Foreign Tax Credit Without Filing Form 1116 in the Instructions for Form 1116:
This election is available only if you meet all of the following conditions.
- All of your foreign source gross income was “passive category income” (which includes most interest and dividends). See c. Passive Category Income , later. However, for this purpose, passive income also includes (a) income subject to the special rule for high-taxed income described later, and (b) certain export financing interest.
- All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-3 (Form 1065), Schedule K-3 (Form 1120-S), or similar substitute statements.
- Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).
The income must be passive, then, and the income and foreign taxes paid must have been reported on one of the qualified payee statements described above.
So, for example, if your foreign taxes paid were for interest on a Form 1099-INT, the foreign taxes paid would have to be reported on the 1099-INT, which you would input into TurboTax.
Foreign tax paid is reflected in Box 8 of Form 1099-INT, and an entry there that's equal to or lower than the $300/$600 limit would generate an entry on line 1 of Schedule 3, without the need for Form 1116.
