topic If I have foreign income in two countries can I carry-forward (and use) the prior year unused credit in the lower tax jurisdiction? in Deductions & credits

If I have foreign income in two countries can I carry-forward (and use) the prior year unused credit in the lower tax jurisdiction?

juliekenst128 — Sat, 15 Jun 2019 17:49:11 GMT

Re: If I have foreign income in two countries can I carry-forward (and use) the prior year unused credit in the lower tax jurisdiction?

pk — Sun, 16 Jun 2019 18:45:40 GMT

I am not sure I fully understand your situation -- what I get from your post is that (a) you have some unused foreign tax credit from past years; (b) you have foreign income from country A and country B; (c) you have paid taxes in country A and country B of which country B may have lower tax rate than the USA on the same income. Please confirm this is generally correct or correct my error.

In such a situation , and when filing US tax return, as long as you have foreign income, you can use accumulated foreign tax credit -- note that TurboTax will compute allowable foreign tax credit ( i.e. a credit against US taxes on the same income ) based on a ratio of foreign income to world income. Therefore I do not understand your question about "lower tax jurisdiction" because while there is a "kick-out" for high tax, the rest of taxes are treated the same i.e. there is no distinction between tax rates of jurisdictions ( except for above mentioned "high" ).

Hope this helps

Re: If I have foreign income in two countries can I carry-forward (and use) the prior year unused credit in the lower tax jurisdiction?

juliekenst128 — Sun, 16 Jun 2019 19:11:09 GMT

I wasn’t sure if the FTC could be used in aggregate vs keeping country A and country B. I’m moving from country A to country B and wasn’t sure if I could use Country A carryover for country B

Re: If I have foreign income in two countries can I carry-forward (and use) the prior year unused credit in the lower tax jurisdiction?

pk — Thu, 20 Jun 2019 18:55:31 GMT

Hope the above answer has clarified that -- FTC is used in aggregate -- not country specific .