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deroskey
New Member

Foreign Tax Credit

I paid some foreign tax on an investment account this year but it wasn't much.  I do not wish to go through the trouble of trying to take the credit.  Unfortunately, I made the mistake on starting to try to take the credit and now Turbo Tax insists on filing Form 1116 even though I am not taking the credit (line 48 is 0).  Do I need to file Form 1116 even if I don't take the credit?  If not, how do I ensure that TurboTax does not file an empty Form 1116?
4 Replies
rogge1722
Level 9

Foreign Tax Credit

do you qualify for the $300/600 exemption?
deroskey
New Member

Foreign Tax Credit

Yes it is less than $300.  But it is in an mutual fund type account (an ETF to be precise) and the company provides no information about the countries where the tax is levied.    So while I presume that the tax is "a. legally owed and not eligible for a refund or reduced tax rate under a tax treaty and b. Paid to countries that are recognized by the United States and do not support terrorism." I don't know what countries they are an can't really answer this question.  At this point the credit isn't worth the trouble (if I take it I'll have to change some other things) so I don't want to take it.  Line 48 is zero, but TurboTax is still going to file an empty 1116.  This probably doesn't matter, but is there a way to tell it to ignore the whole thing.  I'm not taking the credit.
deroskey
New Member

Foreign Tax Credit

This has gotten significantly more complicated.  TurboTax will not e-file my return without me submitting a 1116.  It then forces me to take the Foreign Tax tax credit.  I don't want to take the credit.  How do I get it to forget all of this stuff.
iamtestpass_sms_123
Level 2

Foreign Tax Credit

TurboTax should remove your 1116 form if you follow the steps below.  Only do this if you are sure you want to clear out everything you entered regarding the foreign tax credit, once you clear the form your entries will be gone (if you change your mind later, you will have to re-enter your data).  

To clear the 1116 form from your return:  

  1. Open your return. 
    (To do this, sign in to TurboTax and click the orange Take me to my return button.)
  2. Do a search for foreign tax credit and then click the "Jump to" link in the search results.
  3. Click Continue from the "Foreign Taxes" page
  4. Click Itemized Deduction from the "Do You Want the Deduction or the Credit?" page.  
    (This tells TurboTax that you changed your mind about taking the credit and the 1116 form will be cleared.)  
  5.  From the "Foreign Taxes" page, just don't enter anything. Click on the Federal Review to check your answers or go to another section of TurboTax from there. 
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