Form 1116 schedule B

[sorathe]

Why isn't Turbo Tax supporting efile for Form 1116 schedule B since it is required by IRS in 2021 along with the form 1116? It is a new form for 2021 so it really seems like poor customer service when we have been using Turbo Tax for many years with foreign tax credits. AND it says it supports Form 1116 but it really doesn't if I can't efile and I have to figure out a form by hand by myself.

[Thamilan]

I was on the phone with turbo tax for nearly 6 hrs with 4 different people.

No resolution when 1116 Schedule B will be available (if at all) and no help for e-filing.

They simply say mail it in

If I delete the 1116 carryover worksheet, I loose about $800 (less in tax credit)  and the error in the work sheet disappears and I can e-file I suppose?

If I do that can I file an amended return when Schedule B is available?

[DaveF1006]

Yes, you can file without the 1116 Schedule B now. Form 1116 Schedule B will be available on 03/31 and you can file your amended return after that date. 

[funolfun]

I'm having the exact same problem.  So are you certain TurboTax will have e-file available for Form 1116 Schedule B on March 31, 2022?  If I need to wait until then I will wait as I rather not paper file.  Please confirm.

[TeresaM]

Form 1116 Foreign Tax Credit is now available but we are not expecting Form 1116 Schedule B until March 31st, when it will be available to Print and File by Mail but will be unsupported to e-file. Form 1116 Schedule B is used to reconcile your prior year foreign tax carryover with your current year foreign tax carryover.  Please see the image below.  Filing by Mail generally has delays and the last two years it has had substantial delays. You will be able to print your return after the forms are available but depending on how it impacts your return, you may wish to e-file without the credit, then after all the forms are available and your e-filed return has been processed, file an amendment to claim the credit.

If you decide to wait and file by mail, just re-enter the return after March 31st and take it through Review again.

If you prefer to file without the credit and amend later:

To revisit the section of the return for Foreign Tax Credit:

• Select Federal on the left menu bar
• Click on Deductions and Credits on the top
• Scroll down to the Estimates and Other Taxes Paid section and click on Show More
• Select Revisit/Start for Foreign Tax Credit

This should clear your return but if perhaps the form is still in your return and flags it in Review, you can manually delete the form.

• To Delete a Form go black menu bar on the left
• Click on Tax Tools
• Click on Tools
• Under Other helpful links, click on Delete a Form
• Scroll down and check for 1116 and 1116 Schedule B and if there is either, click on Delete
• Click on the blue Delete Selected Form
• At the bottom Continue
• Repeat until all the forms are deleted
• At the bottom Continue with my Return

This should remove all traces of the form and allow you to file without that error message.

When you come back to amend, this TurboTax Help article has step by step directions to amend your return. You will want to wait until your original return is processed before you submit the amendment. Amend a Return

[fanfare]

how about this?

find other tax software that supports the 1116 Schedule B for e-File.

Then you won't have to wait 8,10 or more months for your money via Form 1040-X.

[ihatetrbotax]

Thanks TT, now no matter what I do I have to enter in all my information again with another brand of software that supports this one form like OLT or TaxAct.  How can you be a premium provider if you don't support a form that every other provider offers?  I have no problem paying more for your service, but when you don't let us file and my only option is to wait to just file by mail, you really leave us no choice.  Very sad that you have such little concern for your long time customers who have paid your premium prices over the years just to leave us high and dry.  It is obvious you have no empathy for your customers or fellow Americans.  

[fsw]

I feel sorry for the TT tax experts, the frontline workers who through no fault of theirs have to deal with an issue in their development team. As a long-time TT customer, I still find tax time every year an exciting adventure; you never know if you may step on a landmine or two.  That said, empathy is in order for TT as new requirements and tax forms pop up every year, and usually also late in the filing season so they have little time to react. The crux issue is not TT but why do we have such a complicated taxing system that gets more so with each passing year? The tax code is now what, 4,000+ pages long?

Whenever I feel like venting, I tell myself imagine filing my (relatively simple) return by hand these days. I can't imagine where to start and how long it will take. Hence, for me, software like TT is still a necessary tool in today's world, but if I were the TT management, I would show my gratitude to all the affected customers by refunding their purchases: "We are sorry for the inconvenience. We didn't like this either. So we are letting you use our product for free this year." Wouldn't that be a wonderful (and equitable) PR gesture?

[lgaines100]

You are correct. This is a new form and it is just as likely that no e-file is an IRS problem not Intuits'. According to the Federal Register, the IRS estimated that 500,000 filers will use the form. They will be drowning in new paper returns before they have dug themselves out of the 2020 paper returns which could not be e-filed because of identity problems. No point is amending after e-file as that also will take a year and generate more paper. The IRS is spiraling down into frozen puddle.

[LXT]

@DaveF1006 , you said 'Yes, you can file without the 1116 Schedule B now. Form 1116 Schedule B will be available on 03/31 and you can file your amended return after that date. '

Does it mean I can wait until 03/31 (when 1116 Schedule B is available) to e-file my return with TT?

Or I have to mail the return first and then file amended return afterwards?

Please confirm, thanks!

[Doug1155]

Thanks Dave.  Question for you ... can you just delete the carryover amount credited this year, so make it zero, and still claim foreign tax paid in 2021 or do you have to forego the full credit including the foreign tax paid?  Makes a big difference to me.  

[chch]

Hello. I was struggling with this exact same problem. I did not want to paper file.  TT had on the record that I had prior years to carryover the foreign tax paid out.  But , then , when I looked at last years TT return, there was the foreign tax credit entry on the 1040 .  So, now I just am not putting any carryover at all and am ready to efile.  I do not know if others will see that this is their situation, but you never know !    Maybe this helps.

[Doug1155]

Hey chch,

Was the carryover from past years?  How did you get rid of it?  Tried to delete on worksheet and form, but no luck.  Only way is to manually change the "Amount Used" to get rid of the overage.  That would be 2018 for me.  Then, not sure if TT will put it back in next year (and potentially use it like this year) when Schedule B is a standard part of the package.

Any thoughts???

[chch]

Well, I looked carefully at the 1040 for 2020 and also for 2019 , and both had the entries for the foreign tax credit , which were subtracted from the tax due.  And the returns were accepted. So, I really don't know how TT used these as a carryover, since they were used.  Anyhow, if you or others find this to be the case , my workaround was to go back to topic list , and either ignore or answer no to the carryover question.  Now I see I can efile , no problems.  

[fsw]

I am not a tax/accounting professional, just a long-time TT user, so please view this post with prudence. 

1. Foreign tax can be treated as a deduction or a tax credit. In the former case, the amount is lumped with all other itemized deductions, such as mortgage interest, state tax, etc., and contributes to reducing the tax liability that way.  In the latter case, the amount goes to the bottom line and reduces the tax liability, nominally dollar for dollar; can be very attractive.

2. Alas, computation of tax credit that can be applied has gotten far more complicated nowadays; hence, we have Form1116 and now F1116 Sch B. Apparently, not all the nominal amount of foreign tax paid in 2021 can be used; a portion of it may need to be held back and "carried-over" to the following year. Not only that, carried-overs from previous multiple years have to be factored into the computation, not just that from 2020, as common sense would dictate (this is an impression on my part from looking at the worksheet or Sch B, and 

where my amateurism shows). 

3. Our situation: F1116 has recently been incorporated into TT, but not F1116 Sch B which awaits a 3/31 release date. However, most discerning to me, from comments gleaned in this forum, is that even with that release e-file may still not be possible :-(. 

4. What to do: Paper-file as TT suggests. Not sure if we should wait for F1116 Sch B before doing that, but it is neither here nor there.

However, if one insists on e-filing, there seem to be several options:

EF-1. The simplest is to forget about foreign tax credit, but incorporate it as an itemized deduction if that matters. In my case, standard deduction far exceeds itemized deductions, so it is not a good option for me. 

EF-2. E-file with an opt-out of the foreign tax credit (by deleting that form from your return package, as suggested), with the view of doing an amended return later. However, I sense some hedging on TT's part on how the amended return may pan out. That is, count on losing that money.

EF-3. Override the "carry-over" amount and set it to zero somehow, as has been suggested in the forum, and TT may then perhaps let you e-file. In my case, I will be giving up about 40%, but hey, I have 60% in my pocket. Plus the lure of an amended/additional return. 

[What is not clear is if I choose EF-1, EF-2, or EF-3, how would TT handle my tax return for 2022. Would the worksheet magically repair and correct itself after the dust has settled? But that is a fight for another day.]