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enjrc
Returning Member

Foreign Tax Credit Pathway Forcing Me to Fill out AMT info I am not subject to

I am using TurboTax Premier Desktop. After I finish answering questions about Foreign Tax Credit, and Form 1116, I am being asked about "Simplified Limitation Election For AMT". I am not subject to AMT this year. I have never been subject to AMT. Turbotax is taking me down an incorrect path. When I go to Forms, Form 1116 is filled out correctly. How do I proceed such that turbotax does not take me down this path of questioning regarding form 1116 as it relates to AMT since I am not subject to this?

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3 Replies
SusanY1
Employee Tax Expert

Foreign Tax Credit Pathway Forcing Me to Fill out AMT info I am not subject to

Form 1116 is filled out with two versions - the primary version and the AMT version - for all taxpayers, whether or not they are subject to AMT in the filing year.  This has to do with the way calculations are made for the amounts allowed to be carried over into future years, as they differ if the taxpayer is subject to AMT in the future. 

The election for simplified limitation method is generally made in the first year that a taxpayer is subject to AMT. 

Can you clarify for us exactly what TurboTax is asking you and where in the program you are seeing this information so that we can better help you navigate those questions? 

 

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enjrc
Returning Member

Foreign Tax Credit Pathway Forcing Me to Fill out AMT info I am not subject to

If I go to Federal Taxes --> Deduction and Credits then click on "Foreign Taxes" (Under Estimates and Other Taxes Paid). I click continue a few times at that point until it asks me if I was to take the deduction or the credit.  I click "Take a credit". I click continue. It asks "Where did you receive dividend income from" I select RIC in pulldown box. I select the 1099-DIV from my financial institution that applies to the RIC. I input my foreign source income. It asks if I want to review my countries. I say no. The next screen says "Simplified Limitation Election for AMT”  “We’ve reported interest, dividends, and K-1 entries from each country. Because you’re subject to the alternative minimum tax (AMT), we need to know how you want to handle your foreign tax credit.” At this point, I stopped. That is because I am not subject to the AMT, but it says on the screen "because you are subject to the AMT...". If I click continue it asks "First Year You Are Eligible" and is asking me to select between 1) first year I am eligible for Simplified...2) I made the election in 2022 3) I chose not to make the election in 2022).  At this point I have stopped because I am not sure how all this applies to me because I am not subject to the AMT this year, and have not been previously.

DaveF1006
Employee Tax Expert

Foreign Tax Credit Pathway Forcing Me to Fill out AMT info I am not subject to

It appears that you have an AMT situation even though you might not realize it. Also if you are filing with Turbo Tax for the first time, it is asking you to make a first year election regarding how handle future AMT situations if these are to appear in the future.

 

If this is your first year filing with Turbo Tax, choose the simplified method if your Foreign Tax Credit is $300 or less ($600 or less if filing jointly).  if not choose the general method and see if you can move past this.

 

if you filed with Turbo Tax in the past, perhaps Turbo Tax determined you have an AMT filing requirement this year. if this is the case, we would like to look at your return to determine why you have this filing requirement. Here is how to submit a sanitized copy of your return to us. Keep in mind, the information in this file is a sanitized copy meaning there is no personal information, only numbers so that we can troubleshoot in depth, check for calculation issues, and to see how certain items are applied. In your case, this will be used to see if there is a AMT filing requirement and why it was applied to your return. Here is how to order. 

 

For Turbo Tax online, go to tax tools>tools>share my file with agent.  When this is selected, you will receive a token number.  Respond back in this thread and tell us what that token number is. 

 

If you use the desktop version, go to the black stripe at the top of the program>online>send tax file to agent. Once you receive the token number, reply back in this thread and let us know what that token number is.

 

@enjrc 


 

 

 

 

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