E-file rejected due to ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

I have same issue. Hopefully someone can provide information on what is causing IRS to reject when all looks correct and no errors when run federal review.

I was on the phone with Premier support today, and although the two people I talked with spent a lot of time on it, we really didn't get beyond just a suggestion to paper file. I visually compared 1116s from 2020 to 2019 and found no differences except the number.

The interview was asking me to deal with 1116 AMT and I'm not sure why. I did have a foreign tax AMT carryover from 2018 to 2019, but not into 2020. This is a complex area I know nothing about and is probably unrelated but I mention it in case there is something in common.

I feel fairly certain that this is a program bug since TurboTax is completely happy with the forms/return but it won't pass IRS muster. Form 1116 hasn't been approved for filing for long, so I'm thinking others will be encountering this soon.

Same problem, we think.

Completing the information was a bit complicated and confusing, but we'd gotten an all-clear in the TurboTax internal review. We had downloaded data from two Schwab accounts' 1099s.  When we went to fill out Foreign Tax Credit info, TurboTax gave us two Schwab boxes to check as sources, so initially we checked both -- and it only filled in data from one of the 1099s. Confusing, but we proceeded to add the other one. TurboTax then lumped the two (both sources were RIC). Had to look up qualified dividends and LT gains on the 1099s to fill that item (not imported info), but okay. That took care of errors in the TurboTax internal review, but the return was rejected when submitted.

The problem is, despite the error message, we never saw a question about US Tax withheld in Step-by-Step, and there is nothing about it on the 1116 or the 1116 worksheet. 

Agreed it is a bug. I've been over the FTC  inputs many times and compared with previous years and the IRs still will not accept the e-file for 2020.

My return has been rejected by the IRS for an issue with the foreign tax credit. TurboTax shows that my return has no errors and my data is identical in nature to last year (slight variance in numbers). When I call TurboTax about this situation the representative has no answer. Why is it taking TurboTax so long to resolve what appears to be a programming issue?

Our return was rejected with reason given as: 

/Return/ReturnData/IRS1116/ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

When entering the required information in TurboTax, the software tried to have multiple Form 1116's even though all foreign source passive income was from one1099 and from one brokerage account. After a few passes Turbo Tax finally produced one Form 1116. The Turbo Tax check indicated no issues. I filed the return electronically and received the above rejection message.

I have read through Form 1116 Instructions and verified line-by-line that what is in the submitted Form 1116 is correct. There is absolutely no mention of USTaxWithheldOnDividendAmt anywhere in either the instructions or the form. Sounds like a bug in the Turbo Tax program or the IRS verification process.

I double-checked the latest IRS form 1116, and the only mention of withholding is "Taxes withheld at source" in Part II.

Yes, it could be the IRS verification process. If Intuit could establish whether that is the cause instead of TurboTax, maybe they could seek a correction or not, but we'd know that we can't file online yet -- and who knows whether the paper copies will be rejected by the same IRS software.

Same issues here... This is costing me so much time... 

Update: Latest E-File Rejection - E-file rejected due to ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

I started a new return and imported and/or entered all data required by the Turbo Tax program. I ran the Turbo Tax review for any errors. There were none. I submitted the new return for e-filing. Turbo Tax e-mail response indicated e-file submitted. Within less than 30 minutes I received an e-mail from Turbo Tax indicating the e-filing had been rejected by the IRS.

 I then reviewed line-by-line the entries on Form 1116 as submitted with the IRS instructions for Form 1116. All entries were correct per those instructions. The only entry that appeared suspect was in Part II column l has RIC instead of a date (such as 12/31/2020). Per Form 1116 instructions there is an exception where something other than a date is entered for foreign taxes suspended under section 909 where "909 Taxes " is entered in column l. This does not apply to my situation. Not sure if the RIC placed in column l by Turbo Tax is appropriate or if the program should have put a date in column l.

I am of the opinion that either the Turbo Tax program has a bug or the IRS verification of Turbo Tax file is not working correctly. Unless this gets fixed in the Turbo Tax program, the IRS verification process or the interface between Turbo Tax and the IRS, I see no alternative but to a submit the return on paper via "snail mail".  

I noticed that as well and changed my dates to "Various". I am pretty sure I got rejections with both "RIC" and "Various".

I've been waiting patiently for another set of updates to see if they fix this. 

Was it accepted ? 

I thought about changing the RIC in column l to 12/31/2220 and resubmit. However, thought I would wait for either someone to find a solution or Turbo Tax to make an update. I am getting a bit tired of rejection. (;>)

Sorry for any confusion, but have not attempted another submission yet.

The program updates for February 26 did not address this problem. My return still passes all checks, but e-file was rejected for the same reason. The "Help Me Fix It" provides no guidance whatsoever other than say to go to Foreign Tax Credit in interview and fix the problem. But it doesn't tell you what the problem is to fix.

Same issue here!  I kept trying different things and got rejected 3 times.  This is not the first year that I've had problems with the Form 1116.  Trying to get in touch with Turbotax was a nightmare!  I'll try to be patient and hope for an upgrade.  Filing by mail given the USPS current problems just doesn't seem to be a good option.

[Deleted post since it was pursuing a wild goose]

SUCCESS ! 

Was able to submit successfully after identifying issue with turbotax for this exact issue 3 times. I compared form 1116 for last year and this year on saved PDFs and turbotax was populating "Various" for a date field (see image below). 

Solution: view your form 1116 for year 2020 in form view mode and override manually  value "various" to date 12/31/2020. This is a date field and should contain date value. Last year this field was populated by turbox correctly. 

OVERRIDE THIS WITH DATE

First let me thank you for posting what you did to get past this issue. I will likely do exactly the same thing so I can get filed.

That said, "Various" is absolutely a correct, and in the case of RICs, arguably the only correct value to be put into this field. I looked at my forms 1116 for several years back as filed and "Various" was the only value ever entered for date paid.

The bug, then, is not that TurboTax is putting in "Various", but that the IRS is rejecting "Various". Nevertheless, I consider entering 12/31/2020 a harmless inaccuracy that I doubt the IRS will ever question anyone about (since the date is irrelevant in the vast majority of 1116s filed for mutual funds at relatively normal incomes), and this information is supporting info only that the IRS does not keep in its in transcript.

Update: I e-filed this and this time it was not rejected .. for this reason but for an unrelated equally mysterious reason. Sigh.

Note that if you choose to use this workaround, the date of 12/31/2020 should be entered in that space on the 1116 Comp Wks. That way, you don't have to use Override.

Success!  As suggested by venkyus, I changed the Various date to 12/31/20 and resubmitted.  I just received notice that my return was accepted.  Thank you very much!

Success with IRA accepting 2020 tax return! Thanks for confirming what I had suspected. Turbo Tax had entered RIC in the Form 1116 Part II Column l for Date paid or accrued instead of a date. I went to the  forms view, overrode the RIC entry with 12/31/2020 and the  return was accepted.

I can confirm that the Feb 27, 2021 Turbotax updates do not correct this problem. The workaround of using 12/31/2020 for the dates on the 1116 Worksheet is still needed.

After researching this some more, it does appear that it is Turbotax's responsibility to convert "Various" to year-end date of the return when e-filing.

Thanks venkyus!

Seems like "form view mode" isn't available in the online version? Does anyone have a workaround for this problem using online version?

Thank you, thank you - it worked! Federal and State both submitted successfully!

I have verified the forms 1116, 1116 Comp wks, 1116 AMT, and all have a proper date of 12/31/2020. I've redone the form and everything checks out in turbotax but keeps getting rejected.  I'll wait a week and see if any updates fix it otherwise I'll be mailing it in.