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I have only $35 in foreign taxes paid on 1099-DIV. Why does TurboTax insist that I have to file form 1116?

See title.  In previous years, I could simply just take a credit of up to $600 of foreign tax (MFJ), based on passive dividend income reported on my 1099-DIV.  Per 2023's 1040 instructions for Schedule 3 - Line 1, this is still the case. 

 

How do I do this via Turbotax in 2023?  Or better yet, what/where/how do I check some buried worksheet somewhere that apparently has the wrong info that is triggering this form 1116 requirement?

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2 Replies

I have only $35 in foreign taxes paid on 1099-DIV. Why does TurboTax insist that I have to file form 1116?

in the info worksheet did you check the box to file form 1116 in any event.

1116 is required if the FFTC comes from other than passive (?) income. dividends are passive income. 

 

on the 1099-div you need to enter only the FTC $. you don't link it to form 1116. you do not provide the foreign gross income and no country or RIC is specified. 

 

I have only $35 in foreign taxes paid on 1099-DIV. Why does TurboTax insist that I have to file form 1116?

I didn't check anything to indicate that I wanted to file 1116... on purpose anyway.  I have since discovered that if you just ignore the "Needs Review" for the foreign tax section in "deductions & credits," then the credit magically will magically find it's way back into my return in the proper place (Sch 3, L1) during the error check.  Any attempt to "see if you qualify for the foreign tax credit" will remove the credit and prompt you to start filling in the form 1116 data.  That's a bug, when the total is clearly less than $600, and is clearly sitting there on my 1099-DIV as in many previous years. 

 

I'll take it I guess.  However, I've also apparently run into several bugs this year, where I've spent much more time fighting with TT than has been normal in the past.   Frustrating to be sure.

 

Thanks for the quick reply.

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