Credit on foreign tax paid: Turbotax does not allow one to list multiple countries and itemize the taxes paid in each one.

[VSP1]

Thank you Amy C. I have the 2022 turbo tax premier CD and it is and was already fully up to date. I followed the above directions my first time around entering the two countries I have for international taxes paid on my dividend statement being South Africa and Canada ( Turbotax already had me in the  passive income category) - it then asked me to select the 1st country which I did but the foreign tax summary screen you include above is nowhere to be found. It just asks if I want to go back and review the input. If I go back, it deletes my prior entries for the 1st country. If I go forward, it continues with the final process without including the 2nd country. I tried deleting the exhibit and repeating the process but wind up with the same result.

Are your above instructions for the on line version?

[VSP1]

Amy, I had an error in my document download from my broker that did not include both countries in the total. Turbo tax would not let me enter multiple countries but suggested I indicate "various" - I did so there and in the Foreign Tax paid section and it seems to have worked. I have full details in the Broker 1099-Div form if I get audited. Thanks again for providing feedback. I wish turbo tax would include the same features in the CD format as they do on line.

[GregY]

I am having this exact issue in TurboTax  Premier 2022.  I have tax paid to several countries, and when I enter the tax amount for the first county, TTax wipes out all of the other countries I've listed.  I'd really appreciate help with this.  It's very frustrating to enter a lot of data, only to have it deleted.  

[AbrahamT]

See this

Follow these instructions as indicated HERE

Please bear in mind that when you get to the section "Tell Us About Your Foreign Taxes", you hit None of These Apply.

When you get to the section "Do You Want the Deduction or the Credit?" say Take A Credit.

I hope this will work for you.

[GregY]

AbrahamT: Your reply does not address the the issue.  The problem is that TurboTax Premier allows me to select multiple countries, as shown in the image pasted into your response, but when the income comes from a single payor (say, Fidelity), it does not allow me to assign income to the selected countries.  It only allows the income to be assigned to one, deleting the rest of the countries chosen.

This wouldn't be a problem if there were multiple payors with one country each, but with multiple Fidelity accounts and multiple countries, it certainly seems like a bug, one that causes a lot of frustration.   

Premier has been a disappointment.  I chose it because it appeared to be intended to help with complex issues like this, but I haven't come across any features that actually add value.  Or work properly.

[JulieS]

When you have foreign dividends from a single payer and they come from multiple countries, select Regulated Investment Company (RIC) as the country and report the total amount.

This is not only easier, it is what the IRS instructions say you should do. 

The instructions for Form 1116 say: "Regulated investment company (RIC) pass-through amounts. You don't need to report income passed through from a mutual fund or other regulated investment RIC on a country-by-country basis. Total all income, in the applicable category, passed through from the mutual fund or other RIC and enter the total in a single column in Part I. Enter “RIC” on line i. Total all foreign taxes passed through and enter the total on a single line in Part II for the applicable category.

[VSP1]

My thanks to all for responding. To complete my 2022 taxes using TX premier, I simply changed Country to various and input the total foreign tax credit across the applicable securities. I created an excel spreadsheet with foreign pd tax particulars by security and kept a paper copy in my own tax file to make a response easier if I get audited for using the "various" field. I don't have an answer for instances where foreign taxes paid are to be credited to multiple countries involving one dividend stock.

Turbo tax definitely needs to improve their software in both circumstances or they will lose customers. Otherwise, their loyal customers may turn to other providers in lieu of switching the online version of turbo tax!!! To maximize  existing client retention, I would suggest that Intuit send a broad email to their existing TX client base outlining these and any other software corrections that have come to light well in advance of next year's release! Just a thought...

[phoenix9]

Julie, This is NOT correct to do in all cases.  Not all companies (such as brokerage companies) are legally considered RICs.  This would be true for mutual fund companies, but not others (such as Morgan Stanley).

[Troubletos]

Here we are in 2023 and the problem still has not been corrected by TurboTax.  I have five countries I need to list.  TurboTax states that the IRS must have each country listed specifying income received and foreign taxes paid by each country.  I listed five countries.  I selected the first country "Canada".  The next screen states "list income and taxes for CANADA.".  I go to the next screen thinking I will do the same for the next four countries and it goes to the next series of questions, like I was done listing everything.  When I go "back" I find all the other countries were deleted.

I cannot simply make up "extra" 1099-Div as TD Ameritrade had the total taxes paid on one page.  If you alter or override TurboTax it will not allow you to E-File either.    

QUESTION is: why hasn't TurboTax fixed this problem by now?  It's been over two years.  By the way I did select "take the credit".  I have turbotax home and business.

UPDATE: I see you can also select "VARIOUS" when you select a country.  This way you can lump everything in one entry.  Maybe this will solve the problem.

[phoenix9]

After numerous hours (phone calls and emails ) with TurboTax,  I give up AGAIN this year.  The problem seems isolated to their desktop (CD) versions and (according to them) does not happen on their online version.   Using "Various" as one country (and totalling all countries into this) is a work-around, but it goes against their OWN guidance that the IRS wants each country individualized.  I will just keep the list of separate countries with their data on hand in case I ever get audited/questioned on this.  I certainly wish TT would fix this on their CD versions!!!!!

[troubletos1]

I hear ya.  It is odd that the online version has no problems but the CD version does.  Seems like a quick fix as the programming would be the same online or CD.  Very odd why they don't want to make the correction.

I wouldn't worry about the IRS red flagging you if you lumped them all together under "various."  For one it won't change what you owe or it won't change your credit amount.  I would just lump it together and be done with it, then complain again to TurboTax.  

So don't feel guilty if you fudge a little combining those countries.  Either that or go online and do your return?     

[LindaS5247]

You can label them as "various" or "RIC".  Keep copies of all of your tax documents for future reference.

An older  workaround that has been used successfully in the past, is to create "Dummy" Forms 1099-DIV for each of the countries.  This workaround is as follows:

While using TurboTax where you have to fill out Form 1116, it can support only one country per Payer.  In the past, if there were more countries than Payers, using “Various” was the technique used to restore the 1 to 1 country/payer ratio. The following technique restores this 1 to 1 ratio by creating additional payers to equal the number of countries.

This addresses the issue of a 1099-DIV with Box 7 showing foreign tax paid to multiple foreign countries and it is necessary to identify and list the countries individually on Form 1116. This is done by utilizing "Dummy 1099-DIV's" as illustrated by the following example.

We have a 1099-DIV with Box 7 displaying the total tax paid to 3 foreign countries we will call “A”, “B”, and “C”.

Navigate to the “Here’s the dividend info we have so far” screen displaying the name of the Payer. This will be our Main Screen.  Bring the Payer up in EDIT mode.  Change Box 7 to the amount paid to  “A”.  Click “Continue “.  Either the Main Screen will appear or 2 consecutive screens asking for dividends paid and the source country.  If the latter occurs, insert the data for  “A”, then continue to the Main Screen.

Click on the New Payer button.  We will name this Payer “Dummy1”.  In Box 1a, put a zero.  This prevents TT from issuing an error. In Box 7, enter the tax paid to “B”.  Leave the remaining boxes blank. Click “Continue” back to the Main Screen.

Again open up a New Payer.  We will name this “Dummy2”.  Put a zero In Box 1a and in Box 7 the tax paid to “C”.  Click  “Continue” back to the Main Screen.

Now when we go to the Foreign Tax Credit Interview Section, we are positioned to enter all the necessary data for each country individually.

Now we consider countries “D”, “E”, “F” etc.  

When multiple copies of form 1116 are needed, they have to be created in the right order.

Using TurboTax’s special instructions as a guideline, the following strategy is suggested: Assign to “A” the largest tax paid, then to “B” the 2nd largest and so on through to “F”.  Then when we enter the Foreign Tax Credit Interview Section, we run them through in the same order; greatest to the least.
You can name the "Dummy Forms" however it makes best sense to you.

If this solution does not work please fell free to contact us back here on TurboTax Community or click here for information on Turbo Tax Support.

[phoenix9]

@LindaS5247, this seems to be very old advice, copied from earlier years...since the date you mentioned to use for the payers is 12/31/18 -- Currently it should be 12/31/22. This problem has therefore persisted for 4 years (I did know it was several years).  Why can't TT correct their known problem?  I have ~30 countries to enter in this advised workaround method for PASSIVE dividends....and there may be false errors resulting?

What is not mentioned here.. is what do you do with the original, single 1099-DIV  that contains both these foreign dividends AND domestic ones?  Do you have to subtract the foreign totals out of the original form so you are not duplicate reporting?

Instead of "Dummy1", should the dummy DIV name be the country name.. e.g "Austria"....and so-forth?

BTW, I have ALREADY  repeatedly called the TT support line on this topic.  I  cannot stress enough how disappointed I am in the lack of this problem being addressed and corrected.  Years (I can vouch for 3 personally) is an extremely low bar to get a fix implemented.   Please assign an expected delivery date for a fix.  Please TT, do better. 

I am likely going to use "Various"  because, as stated..it does not change the end result of the financials.  The hours wasted on this are too many.

[GregY]

This string of replies from TurboTax Experts range from naïve to silly to flat wrong.  It's beyond tiresome.  I've only posted on a few issues over my almost 30 years of using TurboTax, and there hasn't been a single time where I've gotten thoughtful help.  This year's software is the buggiest of all and no one seems to have any interest in making it better.  The fact that this issue has persisted, despite years of asking for help, speaks volumes.

[LindaS5247]

It is fine to use various or RIC.  Unless it is necessary to break down the taxes paid on a per-country basis (which is not common).

Keep your documents for your tax records.