Can I get the $6 I paid for foreign tax as a Foreign Tax Credit without filing a Form 1116, as stated on the Foreign Taxes screen. The Federal final review requires the Schedule A box to be checked -- and deletes the $6 credit.
This is a software error and here is the workaround. If you are using the desktop version, use “A”; if using the on-line version, use “B”
Bring up Form 1040 Wks. and make sure the credit is posted on line 48. If it is then bring up the
1099-DIV Worksheet. In Box 7, double click on the f1116 icon.
Another box will appear. You will see the phrase “Form 1116 (COPY 1)”. Click on that and it will be highlighted. Then click on the “LINK” button.
That box will disappear and you will see the phrase “COPY 1” inside the f1116 icon.
Then recheck Form 1040 Wks. and make sure the credit is still posted on line 48. If so, the error is cleared, no f1116 will be generated and you are done.
It is assumed you are using the exemption and the credit is posted on line 48 of the 1040 Wks. Go to the Foreign Tax Credit interview. We will be going into the interview just far enough so TT will Link to COPY 1 of a f1116 although no f1116 will actually be generated. Here are the headers and the responses.
1. Foreign Tax Credit
2. Tell Us About Your Foreign Taxes
Check the “None of these apply.”
Make sure the other 2 are blank.
3. Foreign Taxes
4. Do You Want the Deduction or the Credit?
Take a Credit.
5. Reporting Foreign Taxes Paid
6. Where Did You Receive Dividend Income From?
If already selected, Continue, otherwise select any one. It doesn’t matter as it is not needed.
7. Income From Foreign Countries
8. Report Foreign Tax Paid to XXXX.
Check under “Select”.
9. Foreign Source Income
If there is an entry, ignore it otherwise type in any arbitrary amount. It is only a filler and not needed.
10. Reporting Foreign Taxes Paid.
At this point, TT should have inserted the Link and cleared the error without generating a f1116. We want to vacate the interview now, so I suggest selecting “Smart Check” to see if the error is cleared. If so, verify the credit is still on line 48 of the 1040 Wks. and you are done.