Foreign Tax Credit

[katiej]

I asked Turbo Tax to use my $20 foreign tax paid as a credit, which the program stated would result in a lower tax bill.  However, the amount of my refund does not change after I request the credit.  Am I doing something incorrectly? 

[AmyC]

Because your foreign credit is below the limit necessary for the form, the program should have already had it in your return and given you the credit. Check your schedule 3, line 1 to see the credit is properly showing.

To see your forms:

• In desktop, switch to Forms Mode.
• For online, see How do I preview my TurboTax Online return before filing?

I have made bold the parts that pertain to you.

The Instructions for Form 1116  on page 1 states:

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 23 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-3 (Form 1065), Schedule K-3 (Form 1120-S), or similar substitute statements. Dec 28, 2023 Cat. No. 11441F 

• Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).

[mesquitebean]

@ katiej wrote:  "I asked Turbo Tax to use my $20 foreign tax paid as a credit, which the program stated would result in a lower tax bill. However, the amount of my refund does not change after I request the credit. Am I doing something incorrectly?"

EDITED:   3/01/24 at 5:14 PM Pacific.

Please disregard answer I previously provided here.  After I posted/sent it I removed it because I was thinking about a small $20 deduction not a CREDIT.   So my previous answer in regard to the IRS Tax Tables would not apply for a Credit.  A credit is given after the tax is figured, so the IRS Tax Table example I mentioned would not apply.  So that answer and example I gave would have been for a deduction, but I said "credit", so it was not correct for your circumstance.

Sorry for the inconvenience.   If you were emailed the answer that suggested your credit issue could be due to the IRS Tax Table method, please disregard.

Check your Schedule 3, Line 1 as @ AmyC had suggested.  Again, sorry for that.

[mesquitebean]

@katiej   I removed my previous answer since it had some incorrect info.  I was thinking of "deduction" not "credit."   See my Edit Note above.   If you were emailed the incorrect answer, please disregard.  Again, I'm sorry for all that.