topic Foreign tax credit in Deductions & credits

Foreign tax credit

cjlang — Mon, 09 Mar 2026 06:21:59 GMT

I am ready to file but my return is not reflecting my foreign tax credit. I know Form 1116 won't be ready for another couple of weeks or so. Is there any workaround? I seem to recall Form 1116 is not always needed to claim the credit.

Re: Foreign tax credit

DanaB27 — Sun, 06 Feb 2022 17:26:30 GMT

Yes, you can elect to claim the credit for qualified foreign taxes without filing Form 1116 if you meet all of the following requirements:

All of your foreign source income is passive income, such as interest and dividends, provided that any dividends came from stock you owned for at least 16 days.
All of your foreign source income and the foreign income taxes are reported to you on a qualified payee statement, such as Form 1099-INT, Form 1099-DIV, or Schedule K-1 from a partnership, S corporation, estate or trust, and,
The total of your qualified foreign taxes isn't more than $300 (not more than $600 if married filing jointly).

But if you claim the credit without filing Form 1116, you can't carry back or carry forward any unused foreign tax to or from this year.

Re: Foreign tax credit

lotter54 — Wed, 23 Feb 2022 15:32:32 GMT

When will turbo tax update the foreign tax credit forms? The IRS has said that they have released the final forms.

Re: Foreign tax credit

DoninGA — Wed, 23 Feb 2022 15:34:48 GMT

@lotter54 wrote:

When will turbo tax update the foreign tax credit forms? The IRS has said that they have released the final forms.

Form 1116, Foreign Tax Credit for tax year 2021 is estimated to be finalized and available in TurboTax on 03/03/2022

Go to this TurboTax website for IRS forms availability - https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

Re: Foreign tax credit

octoman — Thu, 24 Feb 2022 01:14:25 GMT

an additional question. In the past I seem to recall that even if one had over $300 of foreign taxes paid [$600 if married and filing a joint return] that it wasn't necessary to file form 1116. Has this changed? if it's necessary to file form 1116 and the mutual fund has not listed individual nations to which it paid income taxes, is there still a way one can use form 1116 by listing nations as "various" for instance?

thanks

Re: Foreign tax credit

JohnB5677 — Thu, 24 Feb 2022 15:04:03 GMT

Yes, you may be able to claim the foreign tax credit without filing Form 1116, if

Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).
This election isn't available to estates or trusts.
From Page 1 Election To Claim the Foreign Tax Credit Without Filing Form 1116

This has not changed.

Yes you can use Various.

You don't need to report income passed through from a mutual fund or other regulated investment company (RIC) on a country-by-country basis.
- Total all income, in the applicable category, passed through from the mutual fund or other RIC and enter the total in a single column in Part I. Enter “RIC” on line i. If this doesn't work you can use Various.
- Total all foreign taxes passed through and enter the total on a single line in Part II for the applicable category.
- Because computations for inclusions under section 951A are reported on separate Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income, you don’t need to report those inclusions on a country-by-country basis.
- Enter the total inclusion in a single column in Part l and enter “951A” on line i.
From page 15 Tip Election To Claim the Foreign Tax Credit Without Filing Form 1116

Re: Foreign tax credit

octoman — Thu, 24 Feb 2022 18:21:52 GMT

many thanks. I seem to remember this procedure from a time when I used to file using hard copies. As of this time the foreign tax credit module for TT seems to be unavailable though the schedule indicates it will be available late next week. I'll have to see if the method you outlined will be available in TT, but I recall a few years ago it was. Last year our total foreign tax credit was under the threshold so no need to use form 1116

Re: Foreign tax credit

LBMD — Sun, 27 Feb 2022 15:33:55 GMT

There seems to be an error in TT. My foreign tax credit is $75, well below the $300 IRS threshold for needing to file an 1116 form. TT should let me continue without saying that I need to file an 1116, which they have yet to supply even though the IRS has made it available for a week or two now. TT needs to fix the program to allow those of us who are not required to file an 1116 to continue and file.

Re: Foreign tax credit

DanaB27 — Sun, 27 Feb 2022 15:48:57 GMT

Yes, if you verified that you qualify to file without Form 1116 then please follow the steps below to finish your return. Please see Claiming the Foreign Tax Credit with Form 1116 for details on when you can claim the Foreign tax credit without Form 1116.

Login to your TurboTax Account
Click on "Search" on the top right and type “foreign tax credit”
On the "Tell Us About Your Foreign Taxes" screen select "you have no more foreign taxes to enter than on the 1099-DIV" and "You have no foreign tax credit carryover"

Please follow these steps to verify that Form 1116 isn't included on your return and delete it if necessary:

In the left menu, select "Tax Tools" and then "Tools".
In the pop-up window Tool Center, select "Delete a form".
Select "Delete" next to the Form 1116 in the list and follow the instructions.

@LBMD

Re: Foreign tax credit

LBMD — Sun, 27 Feb 2022 19:37:03 GMT

Thanks for the response, but unfortunately it does not help me. I am using TT Deluxe desktop for Windows. I have indeed checked the box that I have no more foreign taxes. It then takes me to screen that says I need to file form 1116. So if your suggestion works on the online version of TT, it doesn't appear to work on my desktop version.

In addition, my version does not have a left menu. I have a menu across the top that has a Tools section. That Tools section has a drop down menu and does not have a delete form option. So far, all the advice I've seen might work on the online version, but not on my desktop. Any help would be appreciated.

Re: Foreign tax credit

DoninGA — Sun, 27 Feb 2022 19:46:59 GMT

@LBMD Click on Forms. When in Forms mode select the Form 1116 and open the form. At the bottom of the form click on the Delete Form button

Re: Foreign tax credit

LBMD — Sun, 27 Feb 2022 20:32:45 GMT

I went to the forms section clicked on delete form and it went away. I then went back to the foreign tax credit section to see if TT would not continue to give me the message that I needed to fill out the 1116. It still shows that I need to fill it out. I then went back to forms and the 1116 which I justed deleted was back again. I even tried restarting TT as soon as I deleted the 1116 form and the same thing happens. It just won't let me bypass the 1116. On the form itself it says "you are not required to file an 1116".

I just can't delete the form or get TT to acknowledge that I don't need it..

Any other suggestions.?

Re: Foreign tax credit

lotter54 — Sun, 27 Feb 2022 20:39:28 GMT

I gave up and am just going to wait until March 3 when TurboTax states the foreign tax credit form will be available.

Re: Foreign tax credit

LBMD — Sun, 27 Feb 2022 20:45:23 GMT

I'm right with you

Re: Foreign tax credit

LBMD — Mon, 28 Feb 2022 13:42:45 GMT

I'm still at a loss to understand why TT doesn't correct the problem in the program that would recognize that amounts under $300 don't require an 1116 rather than have us try various work arounds or have to wait for a form that's not needed and as of yet, not available in TT. I wish I understood their reasoning.

Re: Foreign tax credit

cjlang — Mon, 28 Feb 2022 13:55:07 GMT

I agree wholeheartedly. I was ready to file almost a month ago except for this form. J am required to file it so I am hoping that there are no issues when it is finally released on 3/3.

The issue you raised regarding workarounds also applies to the charitable deduction for non-filers. There is a much more straight-forward, user friendly, intuitive way to program it.

Re: Foreign tax credit

frjohntroy — Sat, 12 Mar 2022 21:40:51 GMT

If the Form 1116 is ready (I assume it is from seeing the q and a), I am still having a problem. I list the four countries from which I received dividends and had foreign tax withheld, but the forms do not let me completer the entries and don't show the credit afterwards in my entered details. (I downloaded the transactions from my broker)

Re: Foreign tax credit

cjlang — Sun, 13 Mar 2022 13:53:32 GMT

I had already entered the 1099-DIV with the foreign taxes withheld amount before the Form 1116 was ready. The foreign tax credit was not registering when I next reopened my return. I went back and revisited that 1099-DIV and went through the steps again. When I got to the end of that series of questions, including source, whether I wanted to take it as a deduction or credit, etc., the tax credit registered on my 1040. Hope this helps.

Re: Foreign tax credit

DaveF1006 — Tue, 15 Mar 2022 20:14:31 GMT

To enter the foreign tax paid for the 1099 DIV('s), go to;

Federal>income and expenses
Interest and Dividends>1099 DIV
Depending if there is 1 DIV or several, select edit
As you view your DIV(S), make sure the box is checked that says My form has info in other boxes (this is uncommon).
Check Box 7 to make sure a foreign tax is reported.
Now go to Federal>deductions and credits>deductions and credits>estimate and other taxes paid>Foreign Tax Credit to declare the credit.

I have seen instances where the imported forms did not record correctly in the Turbo Tax program. On rare instances, it may be necessary to delete the forms and manually enter.

@frjohntroya

Re: Foreign tax credit

fmazziotta — Mon, 21 Mar 2022 15:24:24 GMT

I am also having this problem. It says that I can file without an 1116 but then it says that it doesn't show any foreign tax paid. It is definitely on the 1099 DIV. I also tried putting it directly on the form 3 of the 1040 but that pushes me to a form 1116 which i don't have to use. Then I can't delete the form because the instructions they give don't exist. There is no Tax Tools option. So what is the solution? Last year it just took it from the 1099 and put it in the right space on the 1040. Talk about making it convoluted for no reason.