topic Tax Treaty Foreign Tax Credit for US citizen in Deductions & credits

Tax Treaty Foreign Tax Credit for US citizen

Exergy — Sun, 23 Feb 2025 19:39:58 GMT

Hi,

I tried to use FTC to reduce taxes in USA for the taxes paid abroad on interest income. It turns out that FTC will only credit to about 40% of what interest taxes were paid abroad.

How can I use the tax treaty to reduce US taxes further? Country abroad is Norway

Re: Tax Treaty Foreign Tax Credit for US citizen

AmyC — Sun, 23 Feb 2025 20:21:27 GMT

You won't be able to reduce taxes beyond the FTC. Norway tax treaty with the US shows the US - resident state- will tax the interest earned in Norway but does allow the foreign tax credit. The credit is the lower of the tax rates on the same income.

Re: Tax Treaty Foreign Tax Credit for US citizen

Exergy — Mon, 24 Feb 2025 00:57:17 GMT

Thank you!