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km53
Level 2

I receive interest income from canada, but don't pay canadian taxes on it. What happens to my foreign tax credit carryover? Do i enter it anywhere in my return? .

 
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4 Replies
LinaJ2018
Intuit Alumni

I receive interest income from canada, but don't pay canadian taxes on it. What happens to my foreign tax credit carryover? Do i enter it anywhere in my return? .

If you do not pay taxes to Canada on that interest income, you do not qualify for a foreign tax credit or deduction.  The foreign tax credit is allowed ONLY IF you pay taxes to both the US and Canada.  Based on your information, you would not have a foreign tax credit carryover on this.  If you have any foreign tax credit carryover from the previous year, you can use it to reduce your income this year and if you have any unused amounts, you can continue to carry over to the future years.  You just can't add this year's to the total carryover. 

If you are a US citizen or resident, you are required to report worldwide income including the Canadian interest income.  You would enter as if you receive a Form 1099-int.  Here are the steps (desktop):

  • Open up your program if you have not done so
  • At the right upper corner, in the search box, type in "1099int" and Enter
  • Select to Jump to 1099int
  • Follow prompts to enter inf in box 1
km53
Level 2

I receive interest income from canada, but don't pay canadian taxes on it. What happens to my foreign tax credit carryover? Do i enter it anywhere in my return? .

Can I apply the carryover credit to us income, since there are no foreign taxes this year?
LinaJ2018
Intuit Alumni

I receive interest income from canada, but don't pay canadian taxes on it. What happens to my foreign tax credit carryover? Do i enter it anywhere in my return? .

No, you cannot, unfortunately.  You cannot use it when there is no foreign income.
km53
Level 2

I receive interest income from canada, but don't pay canadian taxes on it. What happens to my foreign tax credit carryover? Do i enter it anywhere in my return? .

how come turbotax computed a number and claimed it
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