Upon running complete review, i get an error on Form 1116. I looked this up under 'Forms' view and notice the form is empty. The form also has red note on top stating "DO NOT FILE". Once I delete this form, errors disappear, but thankfully it does not change my refund numbers.
My question, since the purpose of 1116 is to claim the foreign tax credit, am I missing an opportunity to receive some credit? I did receive 1099-DIV where Box 7 indicated I paid $446 foreign taxes (to Germany).
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If the only source for foreign income is passive income, then 1116 is not required. This might be my case.
It depends. If your foreign tax paid is more than $300 (if filing single) or $600 if married filing jointly, you must file a 1116 to claim the foreign tax credit, even if it is passive income.
If you are under that threshold that is described above, you don't need Form 1116 and should receive the credit if you have enough tax liability to take advantage of the credit. If not, then your foreign tax credit will be carried forward for up to ten years but you would need a 1116 for the carryover.
Check Schedule 3 part 1 line 1 to see if the credit was applied. if you are using Turbo Tax online go to tax tools>tools>view tax summary>preview my 1040. Scroll down to Schedule 3. For the software version, go to forms mode and look on Schedule 3.
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