topic Foreign Dividends from India in Deductions & credits

Foreign Dividends from India

anup1993 — Sat, 28 Feb 2026 17:21:58 GMT

I receive qualified dividends from India. How do I enter this amount in TT Form 1099-DIV. Should I enter $0 in Box 1a (Total Ordinary Dividend) and in Box 1b the qualified dividend amount

Should I enter the same value in 1a and 1b, in which case my refund reduces.

Please advice

Thanks

Re: Foreign Dividends from India

DianeW777 — Sat, 28 Feb 2026 22:40:52 GMT

If they are qualified dividends then enter them in box 1a and 1b, all ordinary dividends go in box 1a (includes qualified dividends). Also, you may also qualify for the foreign tax credit or deduction.

Box 1b. Shows the portion of the amount in box 1a that may be eligible for reduced capital gains rates. (Form 1099-DIV Instructions)
- Where do I enter a foreign tax credit or deduction (Form 1116)?
- Claiming the Foreign Tax Credit

Re: Foreign Dividends from India

anup1993 — Sat, 28 Feb 2026 22:45:30 GMT

Thanks Diane. Appreciated.

But my refund reduces when I enter the same number in 1a and 1b.

Is this correct or a software issue?

Further I don't get the full FTC, wonder why?

Thanks

Re: Foreign Dividends from India

DaveF1006 — Mon, 02 Mar 2026 16:06:07 GMT

Yes, @DianeW777 is correct in her response to you. By not reporting an amount in Box 1a, the income from your dividends was completely excluded from your federal AGI and as a result, you weren't taxed because it ignored your qualified dividend amount you reported in Box 1b. There must be an amount reported in Box 1A as a starting point.

By reporting an amount in Box 1a, you are reporting you have income from your dividends. Reporting the qualified dividend amount in Box 1b, you are telling us that the amount reported in Box 1A is eligible for the lower capital gains tax rate (0%, 15%, or 20%) rather than your standard income tax rate. Now your refund has been reduced because you reported in both boxes, but the tax on those dividends are taxed at the lower capital gains rate than the ordinary tax rate.

As far why you didn't get the full credit, you cannot take a credit for more tax than the U.S. would have charged you on that same income. If the U.S. tax on those dividends is lower than what you paid to India, your credit is capped at the U.S. tax amount.

Re: Foreign Dividends from India

anup1993 — Mon, 02 Mar 2026 20:31:01 GMT

Thanks Dave, for the detailed explanation. That makes a lot of sense to me now. Appreciated.

Re: Foreign Dividends from India

anup1993 — Wed, 04 Mar 2026 10:31:06 GMT

Thanks Diane. I got the answer. Appreciated