Where do I enter Foreign tax credit for Canadian RRSP

[IreneS]

To enter foreign taxes paid (for the Foreign Tax Credit), please follow these steps:

1. Click on Federal  > Deductions & Credits
2. Scroll down to the Estimates and Other Taxes Paid section and click on the box next to Foreign Taxes.  [Screenshot #1]
3. On the Foreign Tax Credit screen, click on the Yes box.
4. On the Before We Begin screen, click on the Yes box.
5. On the Do You Want the Deduction or the Credit screen, click on the Take a Credit box.
6. On the Choose the Income Type screen, mark the radio button next to General category income (since this is retirement income rather than investment income).  [Screenshot #2]
   
7. Continue through the screens. 
   
8. On the Country Summary screen, if no countries are listed click Add a Country. [Screenshot #3]
   
9. On the Foreign Taxes Paid - [country] screen, enter the amount of foreign taxes you paid.  [Screenshot #4]
10. You will be brought back to the Country Summary.  Click Done if you have no other countries to enter.
    
11. Continue through the rest of the [many] screens.
    

[Scouser1116]

This not working on the 2020 version.

I closed a Canadian RRSP & received my funds minus the 25% tax the Canadian government withholds. 

I never get to the Step 2 q "Tax Credit", I next get a question on "Reporting Foreign Taxes Paid", where I click on "Continue"; then a screen entitled "No Other Income or Expenses", where I click on "Yes"; then the screen where I input my country of Residence, the date the taxes were paid, I enter that information and click on "Continue"; then the question on Tax Carryovers, where I enter "No"; then it dumps me back to the "Your 2020 Deductions & Credits" summary page...

Any help /advice appreciated ......I am going crazy going round and round with this

[ReneeM7122]

Where do I enter Foreign tax paid for Canadian RRSP and claim the foreign tax credit:

1. Enter foreign tax credit in the search box at the top of the page and click the Jump to link
2. Click 'Yes" you paid foreign taxes
3. Click through the screens regarding foreign interest and dividends
4. Click yes that you have reported all your foreign income already in TurboTax
5. Click that you want to take a credit
6. Answer question about the Simplified Limitation Election
7. Choose income type for pension - it will be General category income
8. Add Canada
9. Enter description - Canadian RRSP or pension
10. Enter Income amount that you previously reported under Canadian RRSP income

@flackey51

[Zygster]

I wish to take a foreign tax credit on my Canadian RRSP.  I'm a resident of the USA.  Every year until now I've been able to do so with no problems.  However, something has recently changed.

I am unable to find a place to enter the tax amount.

This is what happens:

1. FEDERAL TAXES

2. Deductions & Credits

3. Estimates and Other Taxes Paid

4. Foreign Taxes - Update

5. Foreign Tax Credit - Continue

6. Foreign Taxes - Continue

7. Do You Want the Deduction or Credit? - Take a Credit

8. Reporting Foreign Taxes Paid - Continue

9. Where Did You Receive Dividend Income From? - choose Canada and Continue

10.  Income from Foreign Countries click on Canada and click Report Income

11. Report Foreign Tax Paid to Canada but only shows list of Form 1099-DIV.

The problem is that my Canadian taxes do not have a 1099-DIV form.

Any answers are sincerely appreciated.  thank you.

[DaveF1006]

It depends.  Did you enter a 1099-DIV that has foreign taxes paid reported in Box 7 or a 1099-INT, with foreign taxes reported in Box 6? If you did, that is why your program is asking this series of questions. this information needs to be reported first before reporting other foreign taxes paid.  After you report this, then you will reach a screen that says no other income or expenses, here you will say no.

Then the interview will continue. When you reach a screen that asks what type of income you have, indicate it is income resourced by treaty. Next screen will ask you to add a country, here you will say Canada. Next screen will ask the description and gross amount of your pension. Next, don't add any expenses or else this will lower your foreign tax credit. The very next screen will ask the foreign taxes you have already paid Canada.  After this, finish out the rest of your section so you can claim the credit.

[Zygster]

Hi Dave, thank you for the reply.

As I had no US Form such as 1099-DIV etc., for this Canadian RRSP account,  I solved the problem by setting up a "generic" 1099-DIV for the account, showing the gross distribution and foreign taxes paid in Box 6.

In previous years TurboTax did not require a 1099-DIV form to enter the distribution and foreign tax paid.

[DaveF1006]

This is still not the correct way to report. You did not receive a 1099 DIV and should not have been required to report it this way because it is the wrong category of income to report it in.

Since I can't see your screen for reporting this, I would recommend selecting this link to contact live help which will give you the best benefit at this point.  I just want to save you headache of an audit just in case if this backfires.

[Zygster]

Hi Dave,

I will give the link a try.  However, I don't have too much time left before deadline.

I'm trying to get the correct information into the IRS.  Until this year I've had no problems getting this entered into TurboTax.

Thank you.

[DaveF1006]

Before you call, i will list a precise set of steps to use assuming you don't have a 1099 DIV. Reply back immediately to this post and just say OK. This will take me awhile to list the steps you need to take to report this properly.

[DaveF1006]

Try these steps before calling. Delete your 1099-DIV entry before doing this.

1. Federal>deductions and credits>deductions and credits>estimate and other taxes paid>Foreign Tax Credit>start or revisit.
2. Before you begin this section though, go to the forms mode in your return and delete all previous 1116 forms.
3. Once the 1116 are deleted, go back to step1 above, you should have no reference to the 1099 DIV income, providing you did not report one.  
4. Now as you answer the questions, when you reach the screen that says no other income to report, say no.
5. Next screen should say completing forms 1116, continue.
6. When it says choose the income type, choose  income resourced by treaty
7. Next screen will ask you to add a country. Here you will select Canada.
8. Next screen says other gross income for Canada. Here you will say Canadian Pension and then the amount of the distribution.
9. Don't deduct any expenses on the next screen or claim foreign losses as this will reduce the credit.
10. Next screen will say Foreign Taxes Paid. Here you will list the foreign taxes paid as taxes on other income. Also list 12/31/2020 as the payment date.
11. In two screens following, make sure you leave blank for qualified dividends or long term capital gains.
12. Next screen, be sure you indicate you paid the taxes.
13. You can finish out the section by not recording any answers. At the end of the interview, the program will let you know how much of a foreign tax credit you received.

[Zygster]

Hi Dave,

Thank you for the information, it was helpful.  The screens were a little different from those in your description, but I was able to navigate through them all.

As I had other foreign tax paid from mutual funds, I had to go back and delete all the foreign tax in those 1099-DIV's.  Then I deleted all the Form 1166's. 

When all the foreign stuff was removed I was finally able to add my RRSP information and the Canadian tax paid.  Then I added all the foreign tax back into their respective 1099-DIV's.

It was important to have separate  Form 1166's for Canada and for Various (for the other countries).

This effort consumed a lot of time, but I learned a lot.

It would be nice for TurboTax to revisit the procedure and make it easier to use.

Thank you!

[gmaclean]

This was very helpful. Could you clarify if we still to enter the distribution amount in the income section under Canadian Registered Pension Income or if noting the Foreign taxes paid cover the entire distribution amount and taxes withheld?

[DaveF1006]

Yes, you will still need to enter the Canadian Distribution amount  under Canadian Registered Pension Income.  Then you need to go to:

1. Federal>deductions and credits
2. estimated taxes paid>Foreign Tax Credit

To claim a Foreign Tax Credit paid on this pension.