If TurboTax is including a foreign tax credit on your return despite none of your 1099-DIVs showing any foreign tax paid, here are some specific reasons and steps to troubleshoot the issue:
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- Foreign Tax Credit Carryover: TurboTax may be including a foreign tax credit carryover from previous years. If you had foreign tax credits in prior years, they might be automatically carried over
- Check your prior year returns to see if there are any carryovers.
- Check Box 6 on your1099 INT interest statements to see if there are amounts listed there for Foreign Taxes paid. If you have a 1099 DIV, it will be listed in Box 7. if you have amounts listed in either of these statements, then some of your interest paid is from foreign sourced income.
- Other Income Sources: Check if there are other sources of foreign income, such as a Trust K-1 or other investment accounts, that might be triggering the foreign tax credit
For more information you can refer to the following sources:
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