Foreign Tax Credit

[stefanie-sternag]

If you paid more in foreign taxes than you're allowed credit for in a single tax year, you can apply the unused amount to one previous tax year or up to ten future tax years. -- This situation applies to me, but as soon as TT tells me this, it doesn't give any options to apply it to last tax year or future tax years. How would I go about doing so?

[rogge1722 · Accepted solution]

The rule is you carryback first if feasible, then what cannot be carried back is carried forward.  To determine if you can carryback, if on your 2015 tax return you had the reverse of 2016; i.e., the Foreign Tax Credit Limit was greater than the Foreign Tax paid, then you would carryback.  If that is not the case, you only carryforward to 2017 the Foreign Tax paid you cannot use for 2016. TT stores this along with any other data you need for 2017 to initiate you 2017 return.