Foreign Tax Credit Computation Worksheet

[Welshie10]

My broker reported foreign taxes paid of just over $300 for 2021. Since we have no 2021 tax liability , we didn't use the credit. However, in the foreign tax credit carryovers to 2022 section of the Foreign Tax Computation Worksheet, it lists the credit for 2021 but identifies it as utilized when it wasn't . We get no carryover or carryback. Right clicking on the source information for the entry, it looks like the worksheet is picking up numbers incorrectly. Is there a fix for this?

[ThomasM125]

Can you clarify that the foreign tax credit does not show on line 1 of schedule 3? I'm thinking the credit may be reducing your tax to $0, that is why you don't have a tax liability.

You can view your form 1040 and schedules 1 to 3 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar

[rogge1722 · Accepted solution]

If the exemption cannot be used in whole or in part, by default it will be lost.  The workaround is to elect not to use the exemption.  Here is the technique.

Go thru the foreign tax credit interview.  Then open the Federal Information Worksheet .  Scroll down to Part 6. The fifth paragraph is labeled  “Foreign Tax Credit (Form 1116).  Checkmark the box to file form 1116.

 Then bring up the foreign tax credit comp. worksheet. Scroll down to the bottom to the carryover section and you should see the credit carried over to 2022.

[Welshie10]

That worked, thanks!

[Welshie10]

Schedule 3 is not part of my forms because we aren't using any of the foreign tax credit this year. The suggestion to check the box on the Federal Information Worksheet to file the Foreign federal Tax Credit form 1116 worked. It corrected the entries on the Federal Foreign Tax Credit Computation Worksheet.