How do I resolve foreign tax credit error in online vers? Form 1099int info is correct and am opting for tax credit. Error says Sch A box or Form 1116 should be entered.

[ForeignTaxCreditQuestioner]

I have entered foreign tax amount from 1099INT and selected to Take a Credit but when return is reviewed, error message 'Foreign tax Sch A box or Form 1116 copy should be entered. Return to the place where this was entered to correct the entry.' A form 1099DIV worksheet is presented but I have no way to interact with it other than Sch A checkbox. No 1116 should be required anyway because of amount of credit, only $119, is below the amount required for form 1116. How do I resolve this error?

[ac0500544853]

MY QUESTION CONCERNS DISTRIBUTION IN THE FORM OF A DIVIDEND FROM CANADA, WITH A BROOKLYN, NEW YORK ADDRESS.  THERE WAS FOREIGN TAXES TAKEN OUT AND I WANT THAT AS A CREDIT AGAINST MY FEDERAL TAXES.  YOUR PROGRAM SAYS I HAVE TO FILL OUT TAX FORM 3520, I'M COMPLETELY LOST.  ALSO WHERE DO I PUT WITHHOLDING TAXES FROM AN INTEREST STATEMENT?  THANK-YOU JWH

[rogge1722]

Please submit this as a new posting. It is not related to the issue in this post.

[rogge1722 · Accepted solution]

This is a software error and here is the workaround. If you are using the desktop version, use “A”; if using the on-line version, use  “B”

(A)
Bring up Form 1040 Wks. and make sure the credit is posted on line 48. If it is then bring up the
1099-DIV Worksheet.  In Box 7, double click on the f1116 icon.

Another box will appear. You will see the phrase “Form 1116 (COPY 1)”.  Click on that and it will be highlighted.  Then click on the “LINK” button.

That box will disappear and you will see the phrase “COPY 1” inside the f1116 icon.

Then recheck Form 1040 Wks. and make sure the credit is still posted on line 48. If so, the error is cleared, no f1116 will be generated and you are done.

(B)
It is assumed you are using the exemption and the credit is posted on line 48 of the 1040 Wks.  Go to the Foreign Tax Credit interview.  We will be going into the interview just far enough so TT will Link to COPY 1 of a f1116 although no f1116 will actually be generated.  Here are the headers and the responses.

1. Foreign Tax Credit
             Continue
2. Tell Us About Your Foreign Taxes
             Check the “None of these apply.”
              Make sure the other 2 are blank.
               Continue
3. Foreign Taxes
                Continue
4. Do You Want the Deduction or the Credit?
               Take a Credit.
5. Reporting Foreign Taxes Paid
                 Continue
6. Where Did You Receive Dividend Income From?
                If already selected, Continue, otherwise select any one. It doesn’t matter as it is not needed.
7.  Income From Foreign Countries
              “Report Income.”
8. Report Foreign Tax Paid to XXXX.
             Check under “Select”.
             Continue.
9. Foreign Source Income
             If there is an entry, ignore it otherwise type in any arbitrary amount. It is only a filler and not needed.
              Continue.
10. Reporting Foreign Taxes Paid.
             At this point, TT should have inserted the Link and cleared the error without generating a f1116. We want to     vacate the interview now, so I suggest selecting “Smart Check” to see if the error is cleared.  If so, verify the     credit is still on line 48 of the 1040 Wks. and you are done.                      

[ForeignTaxCreditQuestioner]

Thank you so much. Your answer was well written and worked perfectly.  Excellent job.

[tjmaslyn]

I followed the instructions, after I finally found them, and it worked very well.  I hope Intuit will fix this ASAP, and let the Dev and QA teams know that this should have been caught in unit testing or later - someone was sleeping.  In past years this did not occur, and it is a common occurrence when you own mutual funds.  Great workaround, thank you very much!

[David_Den]

After following the instructions, I performed another "Smart Check."  I continue to receive the same error message even though all of the IRS Forms and Worksheets are correct.

[fengzheng1223]

Had the exact same problem. This solved it, thx!

[Jade1616]

Thank you!  

[David_Den]

After the TurboTax update on 2/14/2019, I performed another "Smart Check."  I am no longer receiving the error message relating to the "foreign tax credit."  Thanks for you help.

[kbg5p]

I'm getting the same problem - TURBOTAX YOU NEED TO FIX THIS!!

[Kate98]

I have had a related problem the last two years, except my foreign taxes paid are greater than $400 and a Form 1116 is NOT generated. The worksheet erroneously subtracts out my my credit.  I had to override it for two years , create my own Form 1116, and then file my own return rather than electronically, since TT won't file with an override.  I do not want to have to do that this year.  Is there a way to force the program to work correctly if this has not been fixed so that I can file electronically.

[AmyC]

The program will not allow forms to be filed before the IRS has approved them. The program works perfectly once the forms are approved and the software is updated. The form 1116 is not a high priority form for the IRS. The IRS is expecting to have it done by January 28 this year. IF they are on time, we should have it the next day at the latest. You can track the IRS and form 1116 here. If you can wait until the forms are IRS approved and in the program, you will be able to file electronically.

@Kate98

[Kate98]

Thanks.  I think I understand your reasoning for no1116 being produced, but that doesn’t explain why the program itself subtracted out my entire foreign taxes paid erroneously on the worksheet.  That is why no 1116 was produced.  The second year, the program also made an error within the worksheet (a different one) which triggered no 1116. I filed both years myself and the IRS accepted my calculations and Form 1116.