I have a very similar issue, as I moved to Italy in 2024 and as a resident there will owe Italian income tax on all worldwide income. My ONLY income is interest earned in the USA and Canada that I have always reported on my USA tax return. I know that I need to report all of that interest from 1099-INT forms on my 2024 tax return like always because I am a USA citizen, but I too cannot figure out how (as in where specifically to do it via Turbo tax online) to get the applicable tax credit for the taxes on that same interest income that I will pay to Italy and that will be far greater in amount then the taxes I would pay in the USA. The interest income was not SOURCED in Italy, but will be re-sourced by tax treaty and considered Italian sourced income since they have first taxing rights to the interest earned. Using tax form 1116 does not seem to work, UNLESS I plug into box 6 for every 1099 the amount of tax I will pay to Italy (but have not yet paid). This may be the solution, but it is technically incorrect since I have not paid any foreign tax on those USA and Canada 1099 interest amounts reported on my USA return. The only other thing that I can think of is to go into the Less Common Income section (Miscellaneous Income) and enter a negative number that exactly equals the total interest reported as Interest income when entering all 1099's, thereby eliminating that income entirely because it is being taxed in Italy under the USA/Italy tax treaty. Not sure if a form 8833 needs to be filed explaining this. Maybe the reality is that Turbotax does not work in a situation like this one and it's software in unable to accommodate what needs to be done here.
