Foreign tax credit question

I have $638 foreign tax paid from 1099-DIV. For some reason, TT calculated a foreign tax credit for only $203 out of it, and the rest are carried over to next year. I wonder why I am not getting the full amount on tax credit. Is there a limit on it? Thanks!

542

Level 15

Apr 2, 2024 9:31:03 AM

yes there's a limit. it's sort of in proportion to the taxes you paid on your taxable income. had it been less than $600 you could have taken the full credit and not file form 1116.

look at form 1116 where the calculation is done.

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Foreign tax credit question