In TurboTax 2018 software, foreign tax credit is not credited anywhere. on the income question page, I did enter foreign tax paid in dividend section.

[JP66666]

I entered foreign tax paid in Income's dividend section. But the foreign tax was not credited anywhere.I double checked Income dividend wks. the foreign tax is indeed entered there. but the tax is not credited back. BTW, I asked the same question a week ago. and received a comment, asking me to check 1040 form line 11.b amount to see whether it is greater than 0. Today, I found that answer url link is not valid. has it been deleted? it is only a week old. amount on line 11.b is 0. What does it tell us? where did i do wrong? I got foreign tax credit in past years by doing the exactly same steps. 

Since I couldn't reply to the previous answer due to invalid URL, I have to re-enter the question.

[mesquitebean]

A thread is archived after 6 days if there is no official answer, only comments.   So that's likely why your thread disappeared.

After entering the foreign tax in the box on the 1099-DIV, there is still more to do in a related topic on "Foreign Taxes."  Did you also go to the Foreign Tax Credit section and answer the Foreign Tax interview questions?   You didn't mention anything about going though the Foreign Tax interview.   That's where the Foreign Tax Credit is calculated.   Here's how to get there in the desktop Premier which you appear to be using:

Federal Taxes tab.
Subtab "Deductions & Credits"
"I'll choose what I work on."
Your 2018 Deductions & Credits page.
Scroll down to topic  "Estimates and Other Taxes Paid."
Find subtopic "Foreign Taxes" and click on Start (or Update.)

[mesquitebean]

@jp66666
Oops!  There was a typo above.  I first wrote "subtab Wages & Income", and I meant to write "Deductions & Credits."   The steps have been corrected above.   You may have been emailed the comment with the wrong steps, so please return to the forum to see the full steps.    Or here are the corrected steps:

Federal Taxes tab.
Subtab "Deductions & Credits"
"I'll choose what I work on."
Your 2018 Deductions & Credits page.
Scroll down to topic  "Estimates and Other Taxes Paid."
Find subtopic "Foreign Taxes" and click on Start (or Update.)

[JP66666]

I did "Estimate and Other Taxes Paid" -> "Foreign Taxes" steps. Today I tried it again to be sure. On "Tell Us About Your Foreign Taxes", I checked the first 2 check boxes( 1: no more foreign taxes to enter other than those already entered on 1099-DIV. 2: no foreign tax credit carryover) and then clicked "Continue". on the next page. it said "You've met the requirement for taking the foreign tax credit without filling out Form 1116, but we don't see any foreign tax payment made( or there is no taxable income to apply the Foreign Tax Credit against)..... To enter foreign tax payment..... you must return to the income section...." , which asked me to go back to enter 1099 -DIV foreign tax payment, which I did already.
BTW, looking at Form 1040, I don't have taxable income ( line 10), therefore 0 on line 11. But I have "Other Taxes ( line 14) from Schedule 4, which was from Form 5329-T for early distribution on a retirement plan. So the Total tax ( line 15 on Form 1040) is not zero. Shouldn't the foreign tax credit/payment be applied against any form of taxes?
Thank you.

[mesquitebean]

I'm not a tax person.  I'll see if I can find someone familiar with the Foreign Tax Credit to assist you during the day today.

The Foreign Tax Credit is a "non-refundable credit" (i.e., it cannot reduce an income tax liability below zero).  And once calculated, it is reported initially on Schedule 3, Line 48.  From there, it then goes to the Form 1040 along with any other Schedule 3 items. On the Form 1040 it would show up on Line 12, and there would be a checkmark on 12b.   

However, the following may explain what you are experiencing:
 I'm confused about the part where you say "I don't have taxable income on Line 10" of the Form 1040.  Why do you have no taxable income?   Please explain that some more.    If you don't have any taxable income on Line 10 and have no income tax on Line 11, that that would seem to explain why it's not being applied.  The Foreign Tax Credit (if allowed) would be reported on Line 12 and applied against the Line 11 income tax amount, and it cannot reduce it below 0 since it is a nonrefundable credit.  That subtraction calculation occurs before the entry for any "Other Taxes Line 14."

Again, I'm a fellow user--not a tax person--so I'm going to ask someone to assist you in this thread who can explain all that better than me and see if I am giving you correct information.  

@rogge1722   Are you able to please assist this user with his Foreign Tax Credit question when you are next in the forum?  Thanks.

[JP66666]

The reason that I didn't have taxable income on Line 10 was that I didn't have a lot of income last year, after applying the standard deduction, I had 0 taxable income. But I have tax on "Other Tax" due to early retirement account withdrawal. I understand that Foreign Tax credit is not refundable credit. I was expecting it would reduce my tax, which didn't happen. Thank you.

[Zbucklyo]

If you had zero taxable income, the foreign tax credit will not be used, because it is a non-refundable credit.  It can't be used to offset the 10% penalty from an early retirement withdrawal.  You can carry the credit forward to future tax years.

[Lisa995]

Its only a credit against income taxes, not against a penalty for early withdrawal.

[JP66666]

Thank you for the responses! by any chance, do you know where I can find the provision in IRS publication, which publication/doc,  about not being able to apply foreign tax credit again the 10% penalty? Thanks again.

[Lisa995]

Not sure you'll find anything that says your NOT able to apply it against early withdrawal penalty, you may be able to find something somewhere that says Foreign tax credit is a credit against "income taxes"....but I'm not going to go digging for you though, sorry.

The penalty isn't a tax, so the foreign tax credit doesn't get applied against it.

[mesquitebean]

You can also tell by the order of calculations on the actual Form 1040 as I outlined above.  The FTC (if allowed) is credited on Line 12 right after the income tax is calculated and before the form gets to "other taxes" (Line 14.)

You may be able to use it another tax year.   There are 2 possibilities.   You can first carryback the credit 1 year and apply it to the previous year return (if allowed in that return; requires amending), or if you can't do that, you can carry it forward up to 10 years.

[JP66666]

Thanks to both of you. @epo39b, your answer makes sense. I will stop here now.

[mesquitebean]

You're welcome.  Hopefully you can apply it to another year.

[mesquitebean · Accepted solution]

See the above discussion.