E-file rejected due to ForeignTaxesPaidOrAccruedDt on Form 1116

[lynhistory]

Hi "Tl888":

Foxbat's tips worked for me here in the US, for my Foreign Inv Taxes. But see this relative to you as a  foreign resident . . .

My daughter is a US citizen and a permanent resident of Australia. She has rental-property and investment income here in the US, and earned income there, where she pays Australian taxes.

Foxbat's tips worked for her, too. Make sure you employ separate Form-1116's for foreign investment income ("X" the box for "Passive category income") and earned income ("X" the box for "General Category Income.") Note: I used 12/30/2020 on one and inadvertently 12/31/2020 on the other -- didn't matter. Never used "various" for anything.

I am no expert. But this works.

[Pjjameso]

So I did the switch from Simplified to normal to get my return submitted and accepted on March 5.  Expecting a refund and IRS2Go is still showing code 152 which means still working on it a date will be provided when available.

For the folks that did the same, has anyone received a refund who switched from Simplified?  Wondering if that is what is holding up the processing.  If so the IRS may have a few to review... Thanks TurboTax! 

[OliveMom56]

I received both my state (CA) and federal refunds in about 4 days when this workaround (switching away from "simplified") was first discovered about a month ago.  There have been news report since, however, about a big backlog of returns at the IRS, so perhaps that has slowed things down.

[Pjjameso]

Thank you, I too have received the state refund, just the federal is taking forever.  Do you remember about the date you submitted the federal return?  Mine is over 30 days ago.

[Foxbat]

Tl888,

Understand the frustration.  The advice I had was for the Form 1116 itself as I did not have any AMT issues. 

The keys remain:  (1) Change at the 1099 level for each 1099 showing foreign income or tax, (2) no "various" for dates or country should survive in 1099 Box 8, consistent confirm the nature of the income (most of us just have mutual/stock dividends and "RIC"  works best as true (3) If mutual funds (again, most of us) check the 1099 Box 8.   (4) Confirm no "various" has survived and is being shown in the Form 1116 itself.  Part I, i (Enter name of foreign country; for me with mutual fund foreign tax using RIC from the dropdown menu worked); Part II Country (L) Date Paid are prime suspects.  It can take an auditor's diligence and attention to detail to crack this monster. 

NOTE:  I have not tried this on other than passive income.  However, if you filed a Form 1116 last year for the same type of income (again, I only had passive income), compare each individual line with this year (yes, a pain to do.  Took me 7 failed attempts to learn to do that before #8 was successful.)  It could be one of the boxes is not checked or line filled in differently on the Form 1116 for 2020.  The error there could carry over to the Form 1116 AMT.  If you are using the Simplified AMT (most do) you should not have to make any entries on the Form 1116 AMT.

[Walnut5]

Was this resolved? TurboTax refuses efiling with a  1116 now. Simple wage and foreign taxes. Only option is to snail mail. Last year was no problem. Advice? Updates?

[lynhistory]

Yes, it was resolved for me on two returns having foreign income and foreign taxes paid (one having only foreign passive income and taxes -- on div and int -- and the other having both  passive and earned income and taxes. Follow Tl888's instructions meticulously. Especially do not use "various." The fake date works. "RIC" is necessary for the passive inc from, say, a mutual fund.

[OliveMom56]

For Pgjamesso: Federal return was submitted on 2/24 (after switching away from simplified) and the refund reached my bank account on 3/1.  State refund a day later.  This was before any TT efforts to fix the problem and before TT was giving advice to file by mail. 

[donnafe]

As of 4/4/21, Turbotax still has not fixed the form 1116 rejection problem.  I have a very large return and do not want to print it.

[Foxbat]

TT tech support told me it is an IRS problem, not a TT problem.  Either way, it is our problem as TT users. 

My advice first assumes you have run error check for your entire return and confirmed no other errors in foreign tax credit have been flagged by TT for resolution before you attempt to file.  If so, when TT says all is fine and you attempt to file, but the IRS disagrees and rejects the filing and the TT rejection note says it is related to the Foreign Tax credit and to review your answers, that is when my advice kicks in.

Take a look at my earlier post on how to resolve the problem starting with each of your 1099's in TT that have foreign income tax (make sure there isn't some bit of income lurking out there as foreign on a 1099) and checking Box 8 to assure no "various" is being used for countries and if your foreign income is from mutual funds (most of us) then use "RIC" from the drop-down menu under countries [scroll up, not down, to find RIC] in BOTH locations in Box 8 that asks for country source.   Then confirm the Form 1116 itself does not have any "various" or blanks for dates where you have numeric entries.  For 1116 Part II blank dates select your favorite date -- I used 12/31/2020 and have the impression as long as it is not "various" it will work.

Yes, it is a pain to do all the detail checking.  It's a detail check odyssey or mailing the return choice.  It took me 8 attempts before I tracked all the "various" and blanks down and realized that is what the problem was.  Hopefully you get to success much quicker than I did.

[Periwinkle65]

Hi Foxbat, 

       Thanks for your generous and comprehensive solution. 

       So, even though TT's error message indicates that the problem is with using the simplified AMT form that this is NOT the problem.? 

       To eliminate "various" on Form 1116 I would have to list each country on separate lines, requiring perhaps 10 additional pages. But it would be worth it to be able to e-file. 

        Yes, this is an odyssey and, like Homer's tale, requires navigating between the " rocks" of IRS requirements and TT possibilities. 

[Foxbat]

You do not have to list each country, particularly if the dividends are from a mutual fund.  Use "RIC" that you will find in the country drop-down menu [Scroll UP to find "RIC", not down].  In the 1099's make sure that RIC is selected for both imported name and the TT name (the boxes are next to each other on line 8).  You can then report all the foreign dividends as a total, which is what the 1099 from your broker will normally show.

Then check the Form 1116 to make sure no "various" survives and the date in Part II box L date is not left blank and is in a format like 12/31/2020 (other dates work too).

Even if you have multiple 1099's with foreign income, you need only one Form 1116 if it is all passive income.  If all passive income (box c: Passive category income),  report it to the same Form 1116 in Box A.  You only use the other boxes if you are checking one of the less common foreign income source boxes a, b or d-g.  Very few will have other than passive income, but of course seemingly anything is possible.

The rejection is probably not related to the Simplified AMT unless you entered something on that form yourself or you have some unusual circumstances elsewhere in your return.   Do check in Forms Mode for error flags to see if something else is amiss with any of the forms listed under Forms in My Return.  Simplified is what most of us use, and to change methods requires, I believe, IRS consent -- short way of saying do that at risk of protracted pain.  

Hope this helps.  Let us know on the board if you find what was causing your rejection so we can share additional solutions.

[Periwinkle65]

Since I have foreign tax deductions from over a dozen countries, I don't see how I could avoid using "various" in this column without listing each country separately. I experimented by filling the blank with the name of 1 country and my return was still rejected for e-filing! 

[Foxbat]

Try using "RIC" from the drop-down menu.  I had dividends from multiple countries as well from various mutual funds.  Despite "various" seeming to be the right answer, the correct answer is "RIC".  Either type RIC in or select it from the country drop-down menu [scroll UP, not down, to find RIC].  Try it, then let us know if that got your efiling accepted.

As a side note, in my first day of IRS Agent training decades ago, the very first thing they taught us was that we were working with tax law, a creature of the United States Congress and the Federal Bureaucracy.  If you attempt to apply logic, you will fail and drive yourself crazy in attempting to find the logic.   For work, we followed law and rules.  For humor, we compared the law and rules to logic.  Despite all appearances, we Agents were not entirely humorless.

[mmmwgm]

Fox Trot answered this question in a great way earlier.  Basically if you have answered "various" for any date on the form 1116  and/or on the Easy Step you must change it to any numerical date in the correct year.   I used 12/31/2020.  You must do this for every date answered various in ALLl places of the 1116 entries on forms and Easy Step.  

 Also, if you have more than one 1116 the one with the highest foreign taxes must be the first one done since it brings forward numbers from the subsequent form 1116s.

 I didn't have the following problem, but based on what others were saying, you can not use the simplified method for figuring the credit so you must elect to NOT use the simplified method. 

These changes worked for me after several rejects.   I hope they work for you if you are having similar problems.