Do I need to file Form 1116 if foreign tax credit is $0 but I have carryovers?

[LA2025]

In a year where the allowed foreign tax credit is zero (Schedule 3 shows 0), does the IRS require Form 1116 to be filed in order to preserve carryovers?

For context, I have a $344 carryover from 2024 and a $345 carryover from 2025.

I want to make sure that not filing Form 1116 this year won’t affect my ability to use these carryovers in future years.

In TurboTax Desktop, Form 1116 and the computation worksheet are generated (visible in Forms view) but are not included in any print or filing packet. I’m trying to confirm whether this is expected behavior or a potential issue.

Thank you.

[CesarJ · Accepted solution]

If your allowed foreign tax credit is $0 for the year but you have foreign tax credit carryovers, filing Form 1116 is generally required to preserve those carryovers for future use. Form 1116 must be attached to your tax return when you want to claim or carry forward foreign tax credits. Even if the current year credit is zero, filing Form 1116 helps maintain your carryover balance with the IRS.

The carryover amounts from previous years can be used in future years only if you properly report them on Form 1116, including attaching Schedule B (Form 1116) when required. Failure to file may affect your ability to use the carryovers later.

This means that to ensure your $344 from 2024 and $345 from 2025 carryovers remain valid, filing Form 1116 this year is important, even with a zero current-year credit.

To enter your foreign tax credit carryover in TurboTax Online and ensure Form 1116 is filed:

1. Go to the Wages & Income section and enter all your foreign income if you haven't already.
2. Navigate to Deductions & Credits and find the Foreign Taxes section.
3. Select Start or Update next to Foreign Taxes.
4. When asked if you want the deduction or the credit, choose Take a Credit.
5. Continue through the screens and TurboTax will prompt you to enter any carryover amounts from previous years.
6. Enter your carryover amounts accurately when prompted.
7. TurboTax will prepare and attach Form 1116 as required to preserve carryovers.

Following these steps helps ensure your carryovers are properly reported and preserved for future use.

[Mike9241 · Accepted solution]

Technically, the answer is that if you do not have unused FTC for 2025 Form 1116 is not required. You preserve the carryover form earlier years as per the Form 1116 instructions. However, I'm generally cautious, so i would force the 1116.

[hristoterezov]

I'm in exactly the same situation and actually form 1116 and form 1116 schedule B with my carryovers were included but yesterday I updated Turbotax and they are not included anymore. I can see form 1116 in forms mode and worksheet with the correct values for carryovers but not form 1116 schedule B and neither of them seems to be included in the pdf when I print and in the e-file package.

@Mike9241 How are you forcing it to be e-filed? Note: I go trough the interview and for sure all carryovers are filled in the fields.

@CesarJ I think the user is using the desktop edition. there are very similar steps to what you posted but the problem is that even though we fill the carryovers in the interview, the form 1116 and form 1116 schedule B seems to be ignored (they are not e-filed or printed). Any advice?

I'm not sure why this form is always so problematic for turbotax? I feel like every year I have different issue with it! Now there is a regression just before I try to file my taxes. Very disappointing!

Any help will be appreciated!

[DaveF1006]

One of the most common reasons Form 1116 or Schedule B drops off is because TurboTax has decided you aren't subject to the Alternative Minimum Tax (AMT), and thus it suppresses the AMT version of the forms. To force them back:

1. Switch to Forms Mode (top right of the desktop app).
2. Open Form 6251 (Alternative Minimum Tax).
3. Look for a checkbox that says "Check to file Form 6251, even if not required." it's right at the bottom of the form
4. Checking this often "wakes up" the associated Form 1116 and Schedule B, pulling them into the final filing packet.

Let us know if this works.

[hristoterezov]

Well no. I'm in not a subject of AMT and actually I was talking about the regular form 1116 and form 1116 schedule B.

Anyway tried your steps. Nothing changed! 

[AmyC]

If you want to force file the 1116 using the desktop version:

1. Open to Forms mode
2. Locate Info Wks on the left side
3. Scroll down to part VI
4. Check the box to force file 1116

[hristoterezov]

I tried clicking the checkbox and form 1116 is again not included in the pdf and also in the list of forms showed in the left side panel in forms mode. If i explicitly open it, it looks good. But even before i click the checkbox everything looked and behaved the same way. So that leads me to believe that even with the checkbox checked it wont be included in the return.

Any other ideas? Anybody? 

[MarilynG1]

If you didn't report any Foreign Tax paid in 2025, but do have a carryover credit from a prior year, you'll see it on the FTC Computation Worksheet.  If Form 1116 is not required for Efiling (no 2025 credit), you can save the worksheet (which shows both prior year and 2026 carryovers) or force open Form 1116 in Forms mode, as you mentioned.  

There's a Print button at the bottom of the form displayed so you can print a copy for your records. 

@hristoterezov 

[hristoterezov]

I don't see what is your point exactly!

What I'm trying to achieve is force turbotax to e-file form 1116 schedule B to the IRS so that once I used them in a few years I don't get auto audited.

Otherwise I have all the documentation and the amounts of $ related to my carryovers (I've entered them manually during the turbotax interview steps). And I'm anyway tracking them manually as well. But again this is not the problem I'm trying to solve.

[DaveF1006]

Since you had no foreign Tax Credit to claim this year, no Form 1116 was filed with the return. As a result, Schedule B 1116 cannot be included in the return without a Form 1116.  

TurboTax follows the IRS e‑file schema (MeF), which is the technical enforcement for authorized efile providers to follow. The IRS MeF schema requires certain fields to be present for Form 1116 to be accepted electronically:

1. Current‑year foreign taxes paid, or
2. A carryback, or
3. A carryforward AND a current‑year credit claim

If these fields are zero, the IRS schema rejects the form. This is why TurboTax refuses to attach Form 1116 when:

• Foreign taxes paid = 0, and
• You are not claiming a credit this year.

The IRS schema is not in a consumer publication — it’s in the IRS XML schema documentation for software developers. This is why TurboTax has built this into its software and abides by it. Forcing it into the program will not work, no matter how hard you try.

To put your mind at ease regarding the "auto-audit": The IRS maintains its own transcript records of carryovers. While having it in the e-file is cleaner, the most critical thing is that you have the records (which you've confirmed you do).

When you eventually claim the credit in 2027 or 2028, you will file Form 1116 then, and that is when the IRS computers will "look back" to verify the carryover source. As long as your 2025 return is saved in your own files with that Schedule B attached, you have the proof needed to contest any automated notice.

If you insist on the IRS having a copy of a Form 1116 and Schedule B 1116, you may paper-file this year to ensure they have a copy of your Form 1116 and Schedule B-Form 1116.  If you have TurboTax desktop, you can generate these stand-alone forms by;

1. Going to the Forms mode in your program
2. Now go to open form.
3. Type "Form  1116"
4. You will now see a Form 1116 in the right pane on your screen.
5. Select print at the bottom of the form to generate form 1116
6. Also when you type Form 1116, you will see Schedule B (Form 1116) underneath that.
7. Open the form and select print at the bottom to print it.

@hristoterezov 

[hristoterezov]

@DaveF1006 Thanks for the explanation! This almost puts my mind at ease! 

Do you have references to the dev documentation of the schema?

If I see this in an official document from IRS or in their developer documentation my mind will be truly at ease! 

Regards,

Hristo.

[DaveF1006]

 To clarify, do you have foreign tax carryovers from 2024 or prior and do you have TurboTax desktop?

@hristoterezov 

[hristoterezov]

@DaveF1006 Yes I do. 

But do you have a link to the developer documentation you were referring? I'll appreciate if I can look into it.

[DaveF1006]

Yes, the IRS does publish the MeF (Modernized e‑File) XML schema and business rules for Form 1116, but they are not publicly accessible. They are only available inside the IRS’s Secure Object Repository (SOR) for registered software developers.

This is why TurboTax support can mention the rules, but you cannot view them unless you are an approved developer with an IRS e‑Services account.  Here is a link for more information about schemas and how you might be able to access them if you are a software developer working on tax-related software.