Foreign Tax Credit TT error: How to fix it

user17716050122 · ‎February 20, 2026

This is a 2026 Update on fixing The foreign Income Credit.

When you get to the "Review"- you should get an Error that says Unable to Electronically File your taxes- you would have to submit by "Paper".

You should also see an error that says for Example- if your federal return is $20,000- It would say "The tax withheld of $20000as shown on For 1040 is greater than or equal to $0, the sum of income from the following source" - What this means is that you're reporting a "0" taxable income-as in their is no taxes to be reported on that's why you're getting the full amount back on your box w2 2a- you need to create a taxable income, in order for it to tax you and submit E-File..

Also, if you goto Tax Tools -> Tools ->View Tax Summary- you shold see your federala nd oyur taxable income would be a $0- This is the issue that needs to be fixed.

Go to Wages & Income and find the Self-Employment section. Select Start or Review next to Self-employment income and expenses.

Tell us the type of self-employment work you do-ENTER THE WORK YOU DO. For example: Cook, Teacher, Accountant etc

How do you classify this work?- Pick the middle option- "My side job income".

Pick this I started in 2025- put the date 01/01/2025

Go through the questions, you should reach a section that says- Let's enter your 1099 Income- Pick "Other Self-employed income".

Type- Electronic Payment- Enter $30,000. The key here is to make sure the amount you put in this box is higher than your Federal Return. THIS IS THE FIX.

Once you're done- if you have any expenses like Vehicle, Meals 50%,Utilities and so on- go ahead and enter them.

Make sure to do your state taxes if needed and go back to your review and the problem is Fixed. You should be able to e-file.

Here are a few tips to keep in mind for next year’s filing:
1. When entering self-employment income, ensure the taxable income amount is higher than the refund to avoid e-filing errors.
2. Use the self-employment section to accurately report income and expenses, including partial meal deductions and vehicle mileage.
3. Keep your personal information, like your driver’s license address, updated before filing to prevent verification delays.

pk

@user17716050122 do you have a question ?

Your solution to "file by mail" only situation i.e. when taxable income is zero ( AGI LESS Deductions allowable), is a bit complicated. The old way was to add interest income of US$1 or similar.

I don't understand why your heading for the message is "Foreign Tax Credit". I say this because FTC is not a refundable credit i.e. FTC can only reduce your tax liability. So if your tax liability is zero because of other credits etc., all of the Foreign Tax Credit is carried ( backward or forward ).

Is this what you are talking about or am I in left field ?

user17716050122

Tried the $1 but it did not work actually, so tried the other method and it did. Besides this is from 2019, they update the system yearly.

When you try to submit your taxes, an error messages comes up asking you to submit by Mail instead of E-file.

For the Form 1116 and Form 2555-EZ are also in the system- you can access this by going to Tax Tools->Tools click on the search icon and type either one of the forms and it should work you through the questions.