I believe I entered appropriately each "easy step" to obtain the Foreign Tax credit: listing the foreign taxes paid when entering the 1099-DIV for the mutual fund (box 7), selecting the appropriate options to be exempt from Form 1116 (no more foreign taxes to enter other than those entered on 1099-DIV; and no carryovers), and finally selecting the option to take a credit. The program then appropriately tallies the tax credit without Form 1116 since the amount is less than <600.
However, when doing a “Smart Check” the following error is reported: “Check this Entry Schedule B --Form 1099-DIV (Mutual Fund XXX): Foreign tax Sch A box or Form 1116 copy should be entered. Return to the place where this was entered to correct the entry.” It also provides a checkbox to click for “Foreign tax Sch A box” to correct the error. Needless to say, if I click on the provided box the credit is converted to a deduction.
I suspect this is an error in this year’s TT program, and do not know how to eliminate the error to continue filing without losing the tax credit. Any help would be much appreciated.
