Even though I have requested the foreign tax credit, Turbo tax is forcing me to take the Schedule A deduction to e-file, saying its an error. How to override?

[rogge1722 · Accepted solution]

This is a software error and here is the workaround. If you are using the desktop version, use “A”; if using the on-line version, use  “B”

(A)
Bring up Form 1040 Wks. and make sure the credit is posted on line 48. If it is then bring up the
1099-DIV Worksheet.  In Box 7, double click on the f1116 icon.

Another box will appear. You will see the phrase “Form 1116 (COPY 1)”.  Click on that and it will be highlighted.  Then click on the “LINK” button.

That box will disappear and you will see the phrase “COPY 1” inside the f1116 icon.

Then recheck Form 1040 Wks. and make sure the credit is still posted on line 48. If so, the error is cleared, no f1116 will be generated and you are done.

(B)
It is assumed you are using the exemption and the credit is posted on line 48 of the 1040 Wks.  Go to the Foreign Tax Credit interview.  We will be going into the interview just far enough so TT will Link to COPY 1 of a f1116 although no f1116 will actually be generated.  Here are the headers and the responses.

1. Foreign Tax Credit
             Continue
2. Tell Us About Your Foreign Taxes
             Check the “None of these apply.”
              Make sure the other 2 are blank.
               Continue
3. Foreign Taxes
                Continue
4. Do You Want the Deduction or the Credit?
               Take a Credit.
5. Reporting Foreign Taxes Paid
                 Continue
6. Where Did You Receive Dividend Income From?
                If already selected, Continue, otherwise select any one. It doesn’t matter as it is not needed.
7.  Income From Foreign Countries
              “Report Income.”
8. Report Foreign Tax Paid to XXXX.
             Check under “Select”.
             Continue.
9. Foreign Source Income
             If there is an entry, ignore it otherwise type in any arbitrary amount. It is only a filler and not needed.
              Continue.
10. Reporting Foreign Taxes Paid.
             At this point, TT should have inserted the Link and cleared the error without generating a f1116. We want to     vacate the interview now, so I suggest selecting “Smart Check” to see if the error is cleared.  If so, verify the     credit is still on line 48 of the 1040 Wks. and you are done.                      

[philwyrick]

Thank you so much! This completely fixed my issue (I used online option 'B'). I really appreciate it.

[JeffB]

This message describes a complicated workaround for a bug in form 1116. This workaround does NOT work for me because I have a complicated set of factors. First, I have foreign earned income and foreign dividends, so I have two 1116 worksheets. Second, I have two financial accounts holding both foreign stocks and foreign mutual funds. One foreign stock is held in both accounts, so this combination of holdings  breaks the tool.

Form 1116 (copy 2) worksheet, part 1g has three columns specifying country - my case is Canada and RIC. Form 1099-DIV for financial company X expects to link to one of these columns (Canada for example) and financial company Y links to the other column (RIC). However, in my case, financial X has two Canadian stocks while financial Y holds Canadian stock plus foreign mutual fund. In my case, column A in 1116 worksheet (Canada) needs a partial sum of holdings from 1099-DIV X & Y while column B contains partial amount in financial Y.  It is complicated, but simple to manually entered correct values into 1116 (copy2) worksheet. All is well, UNTIL I go to eFile. 1099-DIV for financials X & Y don't have the needed link and the resulting error will not allow me to eFile. There is no override, forcing me to file by mail. This is bogus: no override for an error buried in sub-worksheets with an existing bug with a complicated workaround. I have a valid manual workaround but the tool thinks I have done this wrong, when the opposite is true.