Foreign tax credit carryover

[Djritxist]

Hello,

In 2015 I moved to the US, filed jointly with my then spouse, reported both US & Spain income, and ended up with a tax credit as tax rate in Spain was higher. I understand foreign tax credits can be carried over forward for 10 years. Now for 2024, I am filing jointly with a new spouse, and we have to report both US & Poland income.  In this case, the tax rate in Poland is much lower than in the US. Can I utilize the tax credit carryover from 2015 (which pertained to Spain income) to my foreign income (related to Poland) in the 2024 return? My 2 concerns are (i) the tax credit was generated in connection with a different country to the one I want to apply it to now, and (ii) the 2015 tax credit was generated in connection with a joint return with a different spouse.

Appreciate any insights here!

[DaveF1006 · Accepted solution]

Yes, you can utilize that carryover from 2015. The foreign tax credit carryover is not restricted to the country where it was originally generated. It can be applied to foreign income from any country, as long as it meets the general requirements for the foreign tax credit.

The foreign tax credit carryover is tied to the taxpayer, not the spouse. Since you were the taxpayer in 2015 and are still the taxpayer in 2024, you can use the carryover credit, even though you are now filing with a different spouse.

[Djritxist]

Thank you, Dave. This is very helpful.

In my question, I should have clarified that in 2015, while I filed jointly with my spouse back then, the foreign tax credit was generated in connection with my own income abroad (for the part of the year I lived abroad). Now, I intend to file jointly with a new spouse, and I'd like to apply the 2015 credit to the income that my new spouse had abroad during 2024 (for the part of the year she lived abroad). Not sure if this changes your answer, so I wanted to share. Thanks again

[DaveF1006]

No. This fact does not change my answer since both of your names is on Form 1116. The form is not specific on which tax payer the foreign tax carryover is being applied to.