The IRS requires me to enter each country's specific dividend amount and foreign tax paid, in order to determine the proper tax credit to receive. I need to enter Canada, Netherlands, and Switzerland, but the user interface for foreign tax credits is broken and does not properly do this. How do I get around this?
This is a longstanding issue and here is the workaround.
You will need 3 1099’s, one for each country.
For Canada use the original 1099-DIV and a new 1099-DIV for the Netherlands and a new 1099-DIV for Switzerland.
Obtain the following info: For Canada the foreign tax paid.
For the Netherlands, the total ordinary dividends, the total qualified dividends and the foreign tax paid. The same for Switzerland.
On the original 1099-DIV in box 7, replace the entry with the foreign tax paid to Canada only.
Open up a blank 1099-Div. For convenience, name the payer “Netherlands”. In box 1a insert the ordinary dividends and in box 1b insert the qualified dividends and in box 7 the foreign tax paid to the Netherlands. Then subtract these dividend amounts from the original 1099-DIV so that the overall totals remain constant.
For Switzerland open up another blank 1099-DIV and use the same format as the Netherlands.
You will then have 3 separate 1099-DIV’s one for each country.