Foreign Tax Credit for 1099-OID

[sb8020]

Application not allowing me to get Foreign Tax Credit for amount entered under 1099-OID.

How to get Foreign Tax Credit for the amount entered in 1099-OID, since the foreign bank has already collected 30% Tax deduction at source, I want to avoid double taxation.

[LinaJ2020]

You will have to enter the Form 1099-OID in the program before putting in Form 1116.  Here are the steps:

In TurboTax online,

1. Sign in to your account and select Pick up where you left off
2. From the left menu, select Federal
3. From the top, select Wages and Income
4. Scroll down to "Interest and Dividends" section, under Dividends on 1099-DIV, select Start or Edit

To enter Foreign Tax credit information, follow these steps: 

In TurboTax online,

• Open up your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "foreign tax credit" and Enter
• Select Jump to foreign tax credit
• Follow prompts

If you can't claim a credit for the full amount of qualified foreign income taxes you paid or accrued in the year, you're allowed a carryback and/or carryover of the unused foreign income tax, except that no carryback or carryover is allowed for foreign tax on income included under section 951A. You can carry back for one year and then carry forward for 10 years the unused foreign tax. To read more, click here:

https://www.irs.gov/taxtopics/tc856

[sb8020]

I have already entered information under "Interest and Dividends" >"1099-OID, Foreign Accounts"

However when I go to Deductions & Credits > Estimates and Other Taxes Paid > Foreign Tax Credit

It only given me option to enter the credit against the amount which was entered in 1099-INT and does not allow to enter the percentage of what was paid against 1099-OID

[LinaJ2020]

To enter foreign taxed already paid, follow here:

In TurboTax online,

• Open up your TurboTax account and select Pick up where you left off
• At the right upper corner, in the search box, type in "foreign tax credit" and Enter
• Select Jump to foreign tax credit
• Follow prompts
• Choose the Income Type, select "Passive Income"
• On screen, "Country Summary", add a country to continue
• On screen, "Other Gross Income", enter your foreign taxes paid and the amount and follow prompts
• On screen, "Foreign Taxes Paid", under foreign taxes on Other Income, enter the amount
• See image 

If you have paid taxes to both foreign and the US tax authorities, the IRS allows you to claim a foreign tax credit Form 1116.  To learn more, click here: Foreign tax credit

If you can't claim a credit for the full amount of qualified foreign income taxes you paid or accrued in the year, you're allowed a carryback and/or carryover of the unused foreign income tax, except that no carryback or carryover is allowed for foreign tax on income included under section 951A. You can carry back for one year and then carry forward for 10 years the unused foreign tax. To read more, click here:

https://www.irs.gov/taxtopics/tc856