TT adjusts my foreign qualified dividends on Form 1116 using the wrong multiplier - where do I tell TT what the foreign tax rate was?

ap101 — Fri, 11 Apr 2025 23:39:46 GMT

I have $738 of foreign qualified dividends, which I am reporting on Form 1116. TT (correctly) checked the Foreign Tax Credit Computation Worksheet box to make adjustments to this amount for line 1a of Form 1116. I have already paid foreign taxes of $221 on this income, an approx 30% tax rate.

The 2024 IRS instructions for form 1116 say to "multiply your foreign source qualified dividends or capital gain distributions in each separate category by 0.4054 if the foreign source qualified dividends or capital gain distributions are taxed at a rate of 15%, and by 0.5405 if they are taxed at a 20% rate" to get the amount for line 1a. TT, however, is using the 15% multiplier to adjust the income (for a line 1a amount of $299), not the 20% multiplier, which is closer to the tax rate I paid. TT won't let me edit line 1a. Is there a way to tell TT what the foreign tax rate was for the income so that it can make the adjustment using this information?

Re: TT adjusts my foreign qualified dividends on Form 1116 using the wrong multiplier - where do ...

RobertB4444 — Tue, 22 Apr 2025 17:57:00 GMT

The foreign tax rate that you paid isn't what that multiplier is about. It's about your US tax rate. You can't take a deduction for the full amount of foreign tax that you paid because you can only take a deduction for what the US tax would be on that foreign income. In your case the system already figured out that that is 15%.

@ap101

topic TT adjusts my foreign qualified dividends on Form 1116 using the wrong multiplier - where do I tell TT what the foreign tax rate was? in Deductions & credits

TT adjusts my foreign qualified dividends on Form 1116 using the wrong multiplier - where do I tell TT what the foreign tax rate was?

Re: TT adjusts my foreign qualified dividends on Form 1116 using the wrong multiplier - where do ...