I am a US citizen with Foreign Earned Income (FEI) sourced to country A and country B. I will claim the FEIE (Form 2555), followed by the Foreign Tax Credit (Form 1116) on the remaining unexcluded FEI.
In TurboTax, where do I apportion which FEI is excluded between country A and country B?
On Form 1116, when I select both country A and country B to be linked to Form 2555 (selecting "Taxpayer's" for columns A and B in "Income Excluded on Form 2555 Smart Worksheet"), the total FEI (rather than country-specific FEI) is duplicated in both columns A and B. First, this affects 1116 Line 1a (gross unexcluded FSI per country), where TurboTax inserts the total unexcluded current-year FEI once for country A and once for country B. Second, this affects 1116 Line 3d (gross FSI before exclusion per country), where the total excluded FEI is added back to Line 1a, again, once for country A and once for country B.
If this is a bug, I could easily fix 1116 Line 1a by adding a negative amount to each country on Line 1a to correct the duplicate FEI flowing from Form 2555. However, there is no user input possible to correct 1116 Line 3d. Unlinking Form 2555 entirely is also not a solution because TurboTax provides no other mechanism for adding back the excluded FEI on Line 3d. This occurs in (at least) TurboTax versions 2023, 2024, and 2025.
Note: I am fully aware of the mechanics of claiming the FTC and FEIE together and using Form 1116 Line 12 for the disallowance of foreign taxes paid on excluded income under Treas. Reg. 1.911-6.
