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lakshmi-narayan1
New Member

I have paid foreign tax of $939 from the dividends of Mutual Funds. Why there is no foreign tax credit given in the tax return?

 
2 Replies
mesquitebean
Level 15

I have paid foreign tax of $939 from the dividends of Mutual Funds. Why there is no foreign tax credit given in the tax return?

Did you go through the Foreign Tax Credit interview, which prepares Form 1116 (Foreign Tax Credit)?   If not, we can tell you how to get there.

Do you have any overall tax liability on your return?  Or are your taxes already reduced to zero?
DawnC0
Intuit Alumni

I have paid foreign tax of $939 from the dividends of Mutual Funds. Why there is no foreign tax credit given in the tax return?

It is not automatic.  When you entered the income, the tax was generated.  But the offsetting credit won't show up until you get to the credits section and go through the foreign tax credit questions.  See the instructions below to enter the credit.  Here's what you do:

  1. Make sure you've entered all your foreign income.
  2. From within your return, search for     foreign tax credit      and select the Jump to link in the search results.
  3. Click Continue and follow the instructions.  You have to type it exactly as you see it for the link to work.

In most cases, taking the credit works out better than the deduction. We'll help you decide which one's best for you when you go through this section.

If you choose to take the credit (most people do), we'll attach Form 1116, Foreign Tax Credit if your situation requires it.

Note: You won't be able to take a credit or deduction for taxes paid (or accrued) on excluded foreign earned income or housing. This is because excluded income and housing isn't taxed in the first place.

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