If you are using TurboTax online edition, I would suggest you clear cache and cookies on your web browser. Here are the steps:
To enter your foreign tax credit information, follow here:
Thanks for the tip. Unfortunately clearing the cache and changing browsers (from Safari to Chrome) did not help. the Foreign Earned Income and Exclusions section (Wages and Income) takes me all the way through Foreign Income deduction and Housing exclusion, but no place to enter foreign taxes paid (my taxes are not on a form--need to be manually entered, foreign company). The Foreign Tax Credit section (Deductions and Credits) just refers me back to wages and salaries to enter the foreign tax paid. I think there is a system glitch.
I have the same issue. The system is not allowing me to enter amount of foreign taxes paid. I just spent 30 mins with TurboTax support but they could not help. It seems everything is entered correctly but TurboTax is not allowing to proceed with entering foreign taxes paid. It feels like a software bug.
I suggest starting over. Here are the screen headers and responses.
To ensure a clean start, make sure any existing Form 1116’s are deleted. We show the header, then the response.
1. Foreign tax credit
Yes
2. Before we begin
Yes
3. Foreign taxes
Continue
4. Tell us about your foreign taxes
Check the applicable entry, then Continue.
5. Foreign taxes
Continue
6. Do you want a deduction or credit?
Take a credit
7. Reporting foreign taxes paid.
Continue
8. No other income or expenses
No
9. Completing forms 1116
Continue
10. Foreign tax credit worksheet
Continue
11. Choose the income type
General
12. Country summary.
Add a country.
13. Country Name
Select the country
14. Other gross income- country
Enter the amount even though reported elsewhere.
Continue
15. Definitely related expenses-country
Enter applicable data then Continue.
16. Foreign losses
Enter applicable amount then Continue
17. Foreign taxes paid –country
Enter the data then Continue.
18. Country summary
Done.
Continue working through the remaining screens until finished.
If you are trying to take the Foreign Tax Credit,
1. Be sure your Foreign Income is entered.
2. Scroll down to the section under Income & Expenses that says Foreign Earned Income Exclusion and Select Edit/Add
3. Go through the On Screen Prompts until you get to the screen that asks you "Whose Foreign Income Would you Like to Try and Exclude," choose Neither of Us (for Joint Returns) and Continue. TurboTax will take you back to the Income & Expenses Summary Screen.
4. Go to the Foreign Tax Credit section under Deductions & Credits. You should now be able to enter the Foreign Taxes Paid.
If you continue to have this issue after following these steps please let us know.
I tried these steps in the past and again now but I still can not enter foreign taxes paid. I am using TurboTax online version. Could there be a bug in the online version?
Do you have any 1099's or K-1's and if so, do they indicate any foreign income?
No, I do not have any any 1099's or K-1. I just have foreign income from Germany.
Because we cannot see your tax return and you have tried several of the suggested suggestions that worked for others, you may want to call in so a live assistant can help. See What is the TurboTax phone number?
@fsaracev
I did talk with TurboTax live support but she was not able to help. She tried to connect me with TurboTax Live but they do not take calls unless being paid. At this point, I am not sure how to fix what seems to be TurboTax defect. I am open for suggestions.
What screen number that you responded to caused the interview to quit. Did the response say nothing other than go back to wages and salary?
Not sure what you mean under screen name.
She looked at the Foreign Tax Credit section under Deductions & Credits, as well as Wages and Income. Once she tried everything, she suggested to try TurboTax Live but they did not want to take call unless paid.
I've tried all these steps multiple times without success. The system is not letting me enter foreign taxes paid -anywhere (foreign company, no K1 or 1099's).
You enter foreign income in the "foreign earned income and exclusion" section:
Then, find "What form was foreign income reported on?:
Then enter the foreign income amount:
Thank you, but the problem is not entering foreign income. The problem is the system is not allowing entry of foreign taxes paid.
Hi @MaryK4,
You can replicate our steps very easy. You can just follow steps you provided with some fake amount, for example $100k as income:
1. Be sure your Foreign Income is entered.
2. Scroll down to the section under Income & Expenses that says Foreign Earned Income Exclusion and Select Edit/Add
3. Go through the On Screen Prompts until you get to the screen that asks you "Whose Foreign Income Would you Like to Try and Exclude," choose Neither of Us (for Joint Returns) and Continue. TurboTax will take you back to the Income & Expenses Summary Screen.
4. Go to the Foreign Tax Credit section under Deductions & Credits. You should be able to see that it will not allow you to enter the Foreign Taxes Paid.
I have deleted forms 2555, repeated the steps and I still get the same issue.
More information may help resolve your issue. For example, how did you enter the foreign income into TurboTax?
Note that if the foreign income is not on a W-2, 1099-INT, 1099-DIV, or K-1 you use the screens shown by Community user ThomasM125 to "get the income into the system". If after entering your foreign income you don't want to use the Foreign Income Exclusion, just answer accordingly and "finish out" the Foreign Income and Exclusion section.
Then, go to the Deductions & Credits>>Estimates and Other Taxes Paid>>Foreign Taxes section and follow the interview questions. You'll have to designate a category and country of origin for your income, and then you'll get a place to enter the income for that category and country. After that, you'll get a screen to enter the associated foreign tax you paid on that income.
I recognize your frustration. The IRS allows you to claim the exact amount of the foreign taxes paid if you meet certain conditions (see Form 1116 Instructions). However, it is beginning to look as if TurboTax can't handle this situation. TT seems to require that you claim a foreign tax credit through Form 1116, which will always reduce the credit to an amount less than the amount paid. I asked a Customer Service Rep and a CPA at TT how I could claim a credit for the amount paid rather than submit a claim through Form 1116 and neither one could help. I used to think TT was pretty good but now I'm not as confident.
If you do not need the form 1116, the $300 or less can go straight on your form. Otherwise, the form 1116 will be required for a credit.
Where do I enter the foreign tax credit (Form 1116) or deduction for 2019?
What qualifies for the Foreign Tax Credit?
Why doesn't the foreign tax credit show up on Schedule 3, Line 48 of my 1040?
Please see Instructions for Form 1116. Form 1116 says:
Election To Claim the Foreign Tax Credit Without Filing Form 1116
You may be able to claim the foreign tax credit without filing Form 1116. By making this election, the foreign tax credit limitation (lines 15 through 21 of the form) won't apply to you. This election is available only if you meet all of the following conditions.
All of your foreign source gross income was "passive category income" (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for High-taxed income described later, and (b) certain export financing interest.
All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-1 (Form 1065), Schedule K-1 (Form 1120-S), or similar substitute statements.
Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).
After long call with TT support and going back and forth, we finally have solution/workaround. You need to follow exact steps documented in this link https://ttlc.intuit.com/community/tax-topics/help/where-do-i-enter-the-foreign-tax-credit-form-1116-or-deduction-for-2018/00/958875.
TT did not accept that there is product issue but I can tell you from my experience, this is product issue. I am glad this is behind me and I can complete my taxes. Hopefully, this will help someone else to avoid going though the same pain as myself.
I have to take back my previous statement. TurboTax support found a workaround to let me enter data into form 1116 but data were not reflected in the TT calculation. I gave up and asked for refund today.
I am very disappointed that things like this could not be addressed. TT can not handle even basic staff to calculate income from one currency into another. For god sake, IRS provides your conversation rate and you can use these as default. Why users have to do this themselves!
I agree that TurboTax is very weak in supporting some basic stuff. I found one way to claim a tax credit without submitting a Form 1116, as allowed by the IRS (see Form 1116 Instructions). To get around TurboTax limitations, you need to either fill in Form 1116 as if you were going to submit it or select forms and go to Form 1116 I did the former but I suspect you can also do the later. When you have Form 1116 on your computer screen, go to line 33 and override it to enter the Foreign tax credit you can claim per the Form 1116 instructions. This will enter your claim on Line 1 of Schedule 3 and flow through to the 1040 or 1040-SR. Other than the fact that this is an annoying bypass of the TurboTax software design, the biggest issue is that this bypass will probably make it difficult to submit an electronic return. You will have to mail in your return. Also when you print out your return it will include Form 1116. Don't forget to throw out the Form 1116. Your return should be in full compliance with IRS regulations as long as the foreign tax credit you claim meets all of the conditions listed in the Form 1116 instructions.
Here is an educated guess about what is going on. I spent most of two days using online TT and a competing product. The competitor allows easy entry of foreign income and tax credit. However, with TT in answer to the question in Form 2555 (Whose Foreign Income would you like to try and Exclude) I selected to exclude my wife's foreign income. Basically I tried for both the exclusion in 2555 as well as the tax credit in 1116! I entered the 2555 details first and then went to the 1116. Of course I had selected the Tax Credit in reply to the question whether I wanted the exclusion or credit. Somehow TT seems to be able to select the foreign tax credit automatically ignoring the exclusion data I entered.
And.... the TT refund numbers came up with an exact match with the competing product. So it is getting reflected in the calculation once you choose the foreign income exclusion in 2555 as well as the credit in 1116.
As long as I selected Neither of Us to the question Whose Foreign Income would you like to try and Exclude, I ran into all the problems described here.
People can try this and see whether it works. Good luck.
I'm stuck in the foreign tax credit section of the desktop program. I paid two types of foreign tax: 1) Tax withheld from payments made from a RRIF retirement plan in Canada, and 2) tax reported on an uploaded Composite Form 1099. When I get to the foreign tax credit section the 1099 tax is already entered and I can find no way to enter the RRIF tax. Here's my sequence:
Foreign taxes
Update
Foreign Tax Credit
Continue
Tell us about your foreign taxes
None of these apply, Continue
Foreign taxes
Continue
Do you want the deduction or the credit?
Take a Credit
Reporting Foreign Taxes Paid
Continue
Where Did You Receive Dividend Income From?
Canada, Continue
Income from foreign countries
Canada, Report Income
Report Foreign Tax Paid To Canada
Only option is to select the 1099-DIV source which has nothing to do with Canada. I've spent hours going in circles in this section.