Excess Foreign Tax Credit

[ahhlun]

Excess Foreign Tax Credit.

I have Canadian foreign income which I marked as Canadian source and I also paid it in Canada's tax return.

But turbo tax keep saying "Your general category income tax credit exceeded your allowed credit by $____ amount."

This amount above is same number as the one I told TT that I paid in Canada. The whole amount is stated as exceeded.

Why? This income is marked as Canada. I am not claiming FEIE.

TT is refusing to generate form 1116 for me. Schedule 3 line 1 is also empty

[Mike9241]

did you complete the foreign tax credit section in TurboTax. Since we can't see the 1116.

so that leaves these possibilities:

1) all required data has not been entered on the 1116

2) deductions direct and allocated to this income reduce the net foreign income to 0 or a negative number (line 7 of the 1116

3) your taxable income on line 15 of the 1040 is 0 or negative

4)  you selected the cash method but paid the taxes in 2026. This would require the accrual method, but you can't use the accrual method for some foreign taxes and the cash method for others. also if you select the accrual method, that method must be used on all future returns. 

you would need to review the form to see where the limitation comes in, but with online you can't review the form until you pay  the fees

[ahhlun]

Thanks @Mike9241, for the reply!

I'm on TurboTax Premium and it's paid already so I can review the form, what should I look out for?

To my knowledge I completed the Foreign tax credit section...

For your question

1) there's a lot of pages and I'm not sure what's all the required data, I have went back again and again

2) Since there's no Form 1116, I can't see line 7 of that, but I can tell you the net foreign income is no where near to 0

3) my line 15 of 1040 is no where near 0, much higher

4) Not sure what's the cash method and what sure what's accrual method, I am using AMT.

to add, the 1040's 1h has a value that is >10K 

[ahhlun]

@DaveF1006 in case you know about this since I saw you answering another thread on Foreign Tax Credit

[DaveF1006]

If possible, can you send me a diagnostic file of your return? A diagnostic file is just a file with your numbers and scrubbed completely of your personal information. 

Go to tax tools>tools>share my file with agent. Reply back and let me know what the token number is so we can take a look at your file to see what is going on.