The discrepancy might be caused by the fact that state income tax should not be figured into the total on Form 1116 Line 3a. State income tax is a tax based on U.S.-source income amount(s), and should not be figured into the total. From the IRS website Instructions for Form 1116 (2025):
Lines 3a and 3b
Some deductions don’t definitely relate to either your foreign source income or your U.S. source income. Enter on lines 3a and 3b any deductions (other than interest expense) that:
Aren’t shown on line 2, and
Aren’t definitely related to your U.S. source income.
Line 3a.
Include the following itemized deductions (from Schedule A (Form 1040)) on line 3a.
Medical expenses (line 4).
General sales taxes.
Real estate taxes for your home.
State and local personal property taxes.
If you don’t itemize deductions, enter your standard deduction on line 3a.
If you recalculate your Line 3a on your own including just the above listed itemized deductions (medical expenses, general sales tax, home real estate tax, and state and local property tax) - do you still have a discrepancy between that and what the software is showing?
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