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Level 1
posted Apr 4, 2022 3:59:18 AM

TurboTax says I qualify for "Foreign Tax Credit without filling out Form 1116" but ERRORS out during the Federal Review

Hello.

For the past 5 years I have had no issues with "QUALIFIYING for the Foreign Tax Credit without filing out Form 1116".  For instance 2020 I took the $7 credit without filling out Form 1116.  However for 2021, I want to take the foreign tax credit of $5 also without filling out 1116 but  durign the Federal Review, looks like Form 1116 needs to be filled out.  What changed in 2021?  The 1099-DIV is still the same as last year.  In fact, I have had the same 1099-DIV form for the past 5 years.

 

FYI, for TurboTax 2020, there is a message saying "If you're eligible to claim a foreign tax credit in 2021 without filing Form 1116, your must elect again next year."  So this is what i am trying to do.

 

Back in 2019, there was a similar report of a bug and there was a workaround.  However for the 2021 software, the workaround mentions items that I can seem to find in the "forms view".

 

Any help is greatly appreciated.

Thanks 

 

 

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2 Replies
Expert Alumni
Apr 4, 2022 7:04:07 AM

You will still need to go through the Foreign Taxes section to indicate that you had passive income on which you paid a foreign tax.  It will appear that Form 1116 is being completed, but the actual form will not be filed with your return.  You will just see a foreign tax credit on your Form 1040 Schedule 3 line 1.

 

Use the following steps to get started:

 

  • On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner) 
  • This opens a box where you can type in “foreign tax credit” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
  • The search results will give you an option to “Jump to foreign tax credit”
  • Click on the blue “Jump to foreign tax credit” link and enter your information

Level 1
Apr 4, 2022 12:15:03 PM

Hi Annette,

is there are reason that this suddenly got triggered after all these years?  I have never filled out the 1116 and I not even sure how to go about it.  Seems like alot of work for a $5 tax credit...which wont affect the end result...lol.

 

I just hope I have enough info on that 1099-Div form to fill in this 1116.

 

thanks