E-file rejected due to ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

[Click]

My 2020 e-file was rejected due to

/Return/ReturnData/IRS1116/ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

I have two 1116s with two passive income from RIC mutual finds each. There is data in taxes withheld in US dollars for both columns and the grand total for all for is correct on first 1116.

I've stepped through the interview for Foreign Tax Credit and don't see any issues. There are no form errors and it passes final review. Where should I be looking for the missing data?

I do see the thread "E-file rejected due to ForeignTaxesPaidOrAccruedDt on Form 1116" that suggests a bug, but my reason for rejection was actually different.

[Lem47]

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.

[Click]

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.

[prwestmo]

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. 

[ishtari]

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.

[Joe1151]

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?

[Lem47]

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.

[prwestmo]

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.

[leebiang65]

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

[Lem47]

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".  

[Click]

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. 

[leebiang65]

Was it accepted ? 

[Lem47]

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. (;>)

[Lem47]

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

[Click]

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.