topic Foreign tax credit not working in Deductions & credits

Foreign tax credit not working

carolyn14 — Sat, 01 Feb 2020 19:15:17 GMT

I have foreign tax paid on a 1099-div, which i entered as part of the 1099. I've answered all the questions for getting the credit. But it doesn't show on the deductions/credits screen (just last year's credit) and it's not on sched 3.

Re: Foreign tax credit not working

LinaJ2020 — Sat, 01 Feb 2020 19:57:38 GMT

You will need to go through the foreign tax credit Form 1116 path in the TurboTax program. Here are the steps:

Open up your TurboTax account and select Pick up where you left off
At the right upper corner, in the search box, type in "foreign tax credit" and Enter
Select Jump to foreign tax credit
Follow prompts

Re: Foreign tax credit not working

dgross458 — Thu, 06 Feb 2020 06:09:31 GMT

It still isn't working for me.

I have foreign income that was entered and was not able to be excluded, but I paid taxes on. I did the Form 1115 interview and at the end it says my tax credit is too high and has to be carried over or back, but then when I hit next it takes me to Wrap up Tax Breaks and shows as $0 foreign tax credit.

Any help or ideas on what I might be doing wrong would be greatly appreciated.

Re: Foreign tax credit not working

LinaJ2020 — Fri, 07 Feb 2020 23:24:36 GMT

Sounds like your foreign tax credit might be subject to a limitation.

The foreign tax credit is limited to the taxes you would have to pay on that foreign income in the US. So if you paid 15% in the foreign country, but are only in the 10% tax bracket in the US, you would only be able to claim 2/3 of the foreign taxes.

If you can't claim a credit for the full amount of qualified foreign income taxes you paid or accrued in the year, you're allowed a carryback and/or carryover of the unused foreign income tax.

Hope this helps.

Re: Foreign tax credit not working

sam14 — Sat, 22 Feb 2020 03:03:37 GMT

How to claim carryback to 2018 for suspended credit in 2019?

Thanks

Re: Foreign tax credit not working

jwbullock — Sat, 22 Feb 2020 15:08:02 GMT

Here's the problem: In step by step view on a Windows Premiere version, Foreign tax credit "select all countries to which you paid foreign tax on dividends" doesn't work. I tried several times to select multiple countries and TurboTax keeps deleting all but one country. Based on the forum messages this problem has existed since summer 2019 but no relevant fix has been offered.

Re: Foreign tax credit not working

LinaJ2020 — Sat, 22 Feb 2020 15:38:52 GMT

To carry back an unused foreign tax credit to the year 2018, you would need to amend your 2018 tax return by filing an amendment Form 1040-X. Please note that you may carry back only if you have filed a Form 1116 Foreign Tax Credit last year and met other restriction rules. Read Form 1116 instructions Foreign tax credit carryback ( page 17). See the image below:

@sam14

Re: Foreign tax credit not working

LinaJ2020 — Sat, 22 Feb 2020 15:53:45 GMT

Try to enter "Various" as your foreign countries

@jwbullock

Re: Foreign tax credit not working

pixie5008 — Sat, 20 Jun 2020 21:05:12 GMT

I'm experiencing the same issue.

I've entered my income as Foreign Earned Income, but chosen NOT to take the Foreign Earned Income Exclusion.

I've then gone to the Foreign Taxes paid section, followed through the interview to the section where I can enter the amount of tax I paid. When I click "done" in the section, my "taxes due" amount has not changed at all and it is still listed as "0" in the deductions column.

Re: Foreign tax credit not working

Matpel — Fri, 16 Apr 2021 15:25:28 GMT

Hi team, I'm also facing the same problem with the Foreign Tax Credit, and unfortunately i don't understand why it's not working... > I've entered my income (wage) as Foreign Earned Income, but chosen NOT to take the Foreign Earned Income Exclusion to ask the Foreign tax credit. > In the Foreign tax credit section, i've put my foreign taxes but when I click on "Done" in the final section, the system tells me my foreign taxes exceed my Total Amount Tax for 2020 - and it removes everything (my foreign tax credit remains at "0" and my Federal Tax amount has not changed) Any idea how to fix this ? Thanks a lot

Re: Foreign tax credit not working

LinaJ2020 — Wed, 21 Apr 2021 19:39:38 GMT

In order to assist you, I would like to take a look at your program to see what's going on, if that's okay with you. This is called a diagnostic copy request. To send me a copy, here are the steps you would need to take on your end:

In TurboTax online,

Sign in to your account, select Pick up where you left off
To your left, select Tax Tools, click on the drop-down menu
Select Tools
On the Tools Center screen, select Share my file with Agent ( the very last option)
Follow prompts
You will be given a token number
Please provide me with that token number. ( For security purposes, your personal information will not be revealed)

If you are using the desktop version, follow these steps:

Open up your program if you have not done so
On your menu bar at the very top, click "Online"
Select "Send Tax File to Agent" and "Send"
The pop-up will have a token number

@Matpel