2021 Form 1116 Schedule B (carryovers) can't efile

[DCtaxpayer]

what did you switch to and did this work? Were you able also to download information - e.g. tax info from banks, brokerage, etc.? Thank you

[Bill A]

Same here - waited until March 3 for Form 1116 to be ready, then learned that Form 1116 Schedule B won't be ready until March 31, and then, only for paper filing.  My return is 50 pages long, so this is a great inconvenience.  Is TurboTax meant only for simple returns and customers with complex returns should migrate to better tax prep software?

[zymxhjjtm197227]

Hi, I am searching for the option" I choose not to use credit from prior years" but no success.  Rather, when I did interview questions, I got this question" Did you pay foreign TAX in 2021 or have credit to use from prior year?" For this question, I have to answer " YES" ( because I have paid foreign TAX in 2021) .  I guess this would carry over my prior years credit and I cannot avoid 1116 schB.  I am wondering if I override1116 ln 10 to zero, like some people suggested in previous posts, what would happen to my carry over credit, do I loose them all? or can I still use them next season? Also I wonder why we get different interview questions. thanks

[mross17]

Is it the IRS that doesn't support Form 1116 Schedule B for e-file or is Intuit that doesn't support the e-file of this new form for 2021? An ETA on when it will be supported for e-file?

[VolkerP]

This error persist as ob 3/5. Please give your users a better error message by listing an expected release date with the error message.

When will you publish the Form 1116, Schedule B?

[DoninGA]

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@VolkerP wrote:

This error persist as ob 3/5. Please give your users a better error message by listing an expected release date with the error message.

When will you publish the Form 1116, Schedule B?

---

As previously stated on this thread -

Form 1116 Schedule B, Foreign Tax Carryover Reconciliation Schedule is estimated to be available on 03/31/2022 for printing only, it cannot be e-filed.

[Gary GG]

While running into this same problem, I uncovered a related issue:

TurboTax does not automatically enter the lower figure on Form 1116, Line 18 if you calculate your tax using the Qualified Dividends and Capital Gain Tax Worksheet.  By default, it simply enters your AGI on that line.  In order to get TurboTax to enter the lower number on Line 18, you have to go into Forms mode and check a box.

If you do this, it increases the maximum allowable foreign tax credit that you can take.  In my case, if I do this for 2020, I am allowed to claim all my foreign taxes paid as a credit, therefore there is no carryover to 2021.

So, I filed an amended 1040-X for 2020 and did not have to deal with the hassle being discussed here for 2021.

So, the moral is - if you use the Qualified Dividends and Capital Gain Tax Worksheet to calculate your tax, make sure to check the box to use the lower value on Form 1116, Line 18.  It might moot this whole discussion for you.  

[cwkhsk]

Because of this issue, I am finding a lot of little issues TT has. 

I am not sure if TT calculations can be trusted anymore. 

[GarryDG]

I note that Form 1116 Schedule B now shows a release date of March 31, 2022.  E-filing will not be supported which is really disappointing in that according to a recent IRS report, there are still 24 million 2020 returns that have not been processed.   So, I have a refund coming and instead of weeks with e-file, I can expect to wait up to 10 months for a mailed return to be processed.

I have been using TurboTax for 20 years.  One reason was that TurboTax could easily handle my Canadian retirement account (RRSP).  Last year an initial mandatory disbursement  triggered significant foreign income and resultant foreign tax credit and carryover.

I will be mailing in my return this year.  You can bet that I will research the competing tax preparation software to see if they support e-filing of foreign assets and have a viable e-file for Form 1116 Schedule B.  

[max prosperity]

Thanks DoninGA for the clarity. What about skipping the foreign tax credit now, e-filing, and doing an amended return when the Schedule B is ready to use? I'm thinking this would avoid initial delays and still enable me to use the $5K carry forward I now have.

[rifi]

Gary GG

New Member

2 hours ago

‘While running into this same problem, I uncovered a related issue:

TurboTax does not automatically enter the lower figure on Form 1116, Line 18 if you calculate your tax using the Qualified Dividends and Capital Gain Tax Worksheet.  By default, it simply enters your AGI on that line.  In order to get TurboTax to enter the lower number on Line 18, you have to go into Forms mode and check a box.”

Interesting. What box exactly, @GarryDG ?

[ethan4]

@Gary GG : my returns also utilize the QD&CG worksheet. In 2020, TT did not use my 1040 AGI. What it used was about 1/3rd lower. I didn't work through the math to verify that it's correct, but I did not experience that problem. So it's not everyone.

I wonder why it hit you.

[Gary GG]

@rifi 

Who knew 2 people with nearly the same username would post at about the same time, but I think you’re asking me and not GarryDG.

Open up Form 1116 Comp Wks in Forms mode.  There is a big box on Page 4, just above the carryover tables that says “Form 1116, Line 18 Adjustment Exception Smart Worksheet” with 3 boxes.  If you have less than $20,000 in foreign dividends, you can check Box A and TurboTax will enter the lower amount on Form 1116 Line 18. (That was my situation.). If you have more than $20,000 in foreign dividends, you should be able to check both boxes B and C, and it will make the same adjustment.

[BrownieZ9]

3/5/22. What I did to duplicate my success both in getting a CREDIT for Foreign Taxes Paid (Deduction DID NOT help me), and in enabling me to EFILE both Federal and State, was to START ALL OVER (an experimental 2021 return). I clicked start new return, then used my 2020 return as the flow through. From there I started STEP by STEP.  My stock brokerage has a 'flow through' so all the dividends, interest, MISC, royalties, etc., all are added into TT automatically.  With that done, following in Step by Step, Personal, Deductions and Credits, click Foreign Taxes, AND then I had choices whether to use Foreign Tax Credit Carryovers from prior years. When the list of prior year carryover credits came up, first I tried just zero'ing the 2020 carryover, but then earlier carryovers popped up, then with clicking Back a few times, a screen appeared saying Do you have any Foreign Tax Carryovers for 2020 or a prior year? AND THAT's where I clicked NO.  In the Step-by-Step process.  And I proceeded with Step-by-Step filling out the various coutries and amounts. (NOTE very important [you might miss this in a TT note]: the FIRST country to LIST [forget how your broker listed them] is the one that paid the most Dividends and charged the most in Foreign Taxes!) .  In doing so, I lost $44 from a 2020 FT Carryover, but I gained many hundreds in 2021 FT credits and could then efile.

        In my minds eye, that made a difference in avoiding the "no efile possible, must print, line 10, Schedule B, line 3" bull**bleep** (from there I filled out the Form 1116 Copy 1 and Copy 2 (I had four sources of foreign taxes [BTW each country is a source, e.g., Russia (column A for my first company), Canada (column B for 1 company), and Canada (column C for another Canadian company]).  Note, too, there are columns in filling out Form 1116 and its correlative worksheet, that'll say "o" or "q" "dividend", or similar, but what's wanted is the TAX you paid that entity (country), not the dividend income from that source!  When I got done, I noticed in FORMS that all the necessary "Explanations" pertaining to Copy 1, 3, A; 2, B, etc., had also automatically been printed out, since they're necessary to cure "errors" when you get to Review.

[krsbozo]

@Gary GG 

Thanks for your help. My AGI appears on Form 1116 line 18, but when I go to the smart worksheet you mentioned, “Form 1116, Line 18 Adjustment Exception Smart Worksheet”, I see that box A and C are already checked. I have less than $20,000 in foreign income, but the box was checked. And I still have a carryover for 2021, unfortunately. 

It was worth a try, and I appreciate your help.