Foreign tax credit LIMIT

[2626Beckwith]

Hi Dave,

As an Employee Tax Expert, can you confirm that the following re-post (@TommyMo) is accurate and that a taxpayer using Turbo Tax can adjust the input field for foreign taxes paid so that the amount entered is $600 (rather than a higher amount actually paid) and then can elect the SimplifiedMethod for claiming FTC?

 pk

Level 15

@TommyMo , here is the rub ---- if you let TurboTax recognize ( enter  ) the full $941.24 as your foreign taxes paid, it would not even ask  you if you want the simplified method  and/or the safe harbor treatment.  You will need to  change that entry on the worksheet/entry area for the 1099-DIV to $600 --- then it will ask if you want the simplified treatment and therefore allow the recognition of the $600  as foreign tax credit against US taxes.

If the amount remains where it is  downloaded ( US$941.24 ) , TurboTax will only ask if you want foreign tax credit or deduction ( for an itemized deduction on schedule-A  ).

Does this help your situation or do you need more help ?

‎March 10, 2021 10:57 AM

[DaveF1006]

Yes. you can edit the 1099 DIV entry you made in the program. In Box 6 and change to $600 and then you may make the decision to make the simplified election.

[2626Beckwith]

Dave - Thank you for the quick response to my question.  

Best,

Steve