foreign tax paid credit

[JRS2]

In 2018 the foreign tax paid by broker was taken as non business credit but not in 2019.  In 2019 it was considered in std deduction as personal property tax.  Why?

[KurtL1 · Accepted solution]

Foreign Taxes you pay can be reported in two areas of your return. They can be reported as a tax paid in your itemized deductions, or they be taken as a tax credit.

When entering in the foreign taxes you are given the choice of either entering the amount as a itemized deduction or a tax credit.

[Year2019]

I am unable to input my foreign tax paid credit too. I did as you instructed many times but it doesn’t let let put in my foreign tax paid amount. The system (Turbo Tax ) keep saying that they do not see there is any foreign tax paid or there is no foreign income. This is just a $90 foreign tax paid on my 1099- DIV, from a mutual fund from Canada.

I have tried talking to Turbo Tax specialties twice, spent 2 1/2 hours on the phone with one and he said it’s beyond their expertise and wanted me to talk to a CPA which I will have to pay extra to talk to. The second person I talked to said the same. It’s a $90 foreign tax credit and I have to pay additional $70 more to talk to a CPA. I feel there is something wrong with Turbo Tax system even if I pay extra to talk to a CPA will not correct the issue, 

Very disappointed with Turbo Tax this year. I am trying to finish my Tax Return before Turbo Tax’s price increase  after February 29th. Does not seem like I can with this issue. I just will have to let an accountant do my tax return this year as I heard that there are other issues with Turbo Tax this year. 

[tiger49]

You have my sympathy

[DaveF1006]

Did you report foreign tax paid on Box 7 of your 1099 DIV.  To get to Box 7, you must check the Box that says My form has info in other boxes (this is uncommon). This will open up additional boxes in your 1099 DIV.

[jill43]

I'm having the exact same problem. I pay foreign taxes every year and this is the first time I've had an issue. I have the box checked and foreign tax paid filled out in box 7 from my 1099DIV. When I go to take the credit under "deductions & credits" it tells me I haven't entered any foreign tax payments and I need to go back to wages & income to enter them. I go back, and it's all there. Not sure where to go from here. 

[KarenJ2]

You may want to try to delete the 1099-DIV and re-enter.

How do I view and delete forms in TurboTax Online

[jill43]

That worked! Thank you

[shung89]

My foreign income is from wages and I too would like to take a Foreign Tax Credit but Turbo Tax also says I haven't entered any foreign tax paid but where I can do that if its not under a 1099?? Any thoughts?

Is this 1099 Misc, even though the employer is foreign??

@jill43 @DaveF1006 @KarenJ2 

[KarenJ2]

If you received a foreign wage statement instead of a W-2, you need to enter the amount in 

To enter your foreign wages in TurboTax, you need to: 

1. Enter foreign earned income in the search bar at the top of the screen and click the Jump to link 

2. On the first screen it will ask you what form your foreign income was reported on, you need to check statement from my foreign employer (converted to USD) 

3. On the next screen enter your Foreign wages **

4. Continue through the screens answering the questions 

5. Then you will get the screen,Would you like to Try and Exclude Your Foreign Earned Income,  

6. Enter - answer either yes or no 

7. The program will tell you that form 2555 will be deleted if you do not want to use the foreign earned income exclusion.  Say OK.

To enter your foreign tax 

1. Type in foreign tax credit in the search bar at the top of the screen and click Jump to 

2. You will need to click through a number of screens about dividends and interest.   

3. When you get to the screen, Choose the Income Type, click on General Limitation income.  This is the category for wages. 

4. Continue through all the rest of the screens entering the country and the foreign tax amount. 

5. You enter the foreign tax amount in the box Foreign Taxes on Other Income**

**On the next screen with a box for adjustment to wages, if you had any US workdays during 2019 

you need to allocate your wages by total US days / Total of all workdays.  This is because only foreign workdays can create a foreign wages.  So if you had 10 US workdays in 2019 and 240 total workdays,  you would multiply 10/ 240 * total foreign wages = US source income  Then you subtract the US source income in the adjustments to wages box to get actual foreign wages earned.

If you did earn foreign self-employment income, you need to first enter your self-employment income in the business section and then in the foreign earned income exclusion section.

[cjkca]

I am struggling with the same issue. I have now deleted and re-imported the 1099 several times. I still can't get TurboTax to let me enter the foreign dividends that generated the foreign tax. This is driving me crazy!!

[jill43]

I had to go back and delete the entire form and enter it manually. There’s something with the import that screws it up. Hope that helps! It frustrated me for hours 

[DavidLC]

I would like to take a credit for the $354 of foreign taxes I paid on a dividend from a Japanese company.  I've spent more than 2 hours trying to get that credit in Turbo Tax but I can't find the appropriate way to get that credit.  How can I get that credit in TurboTax?

[DawnC]

You can deduct their foreign taxes on Schedule A, like other common deductions, or you can use Form 1116 for a tax credit and subtract the taxes you paid to another country from whatever they owe the IRS.

Both the credit and the deduction are entered in the same place. 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. Answer Yes to Did you pay foreign taxes in 2019 or have credits to use from a prior year?
4. Follow the instructions to get the credit or deduction.

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 aren't taxed in the first place.

Related Information:

• What qualifies for the Foreign Tax Credit?
• Why doesn't the foreign tax credit show up on Schedule 3, Line 48 of my 1040?
• Can the Foreign Tax Credit be carried over or carried back?

@DavidLC 

[bmochel]

I RECEIVE DIVIDEND INCOME FROM A TRUST THAT IS FROM A CANDIAN COMPANY. CANADIAN TAX IS WITHHELD AT THE SOURCE (15%). THE TRUST REPORTS TO ME ON K-1 THE GROSS AMOUNT OF THE DIVIDEND BUT BUT NOT THE TAX WITHHELD THE TRUST DISTRIBUTES TO ME 100%OF THE INCOME. HOW DO I CLAIM THE FOREIGN TAX CREDIT AS I ONLY RECEIVE THE NET AMOUNT