It depends on the amount of foreign income you earned during the year. The IRS limits the foreign tax credit you can claim to the lesser of the amount of foreign taxes paid or the U.S. tax liability on the foreign income. The excess limit is created when the U.S. taxes on that foreign income are greater than the foreign taxes paid. Without knowing what your foreign income is for the year, let's assume the following.
Let's assume your foreign income is $50,000 while your total income is $200,000. Your foreign tax is $3000. Here is the amount you may claim for this year based on the following formula. ($3000)($50,000/$200,000)=$750. There is $2250 of excess tax.
Now since you have a foreign tax carryover from previous year, you may now use an additional $2250 of that carryover to receive the full $3000 this year and this is where the foreign tax carryover comes into play in your return. Since your total US tax liability is more than the $3000 foreign tax credit, you will receive the full amount of the credit this year. If it was less than $3000, it would be limited by the amount of the tax liability and the rest would be reported as a carryover.
@Venkykrishnan
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