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Level 6

Question

E-file rejected due to ForeignTaxCreditSource/USTaxWithheldOnDividendAmt

Forum|Forum|5 years ago
February 22, 2021
10 replies
0 views

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

Level 2

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.

ClickAuthor

Level 6

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

Level 2

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.

leebiang65

Level 2

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

Lem47

Level 2

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".

ClickAuthor

Level 6

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.

lgs0304

Level 2

Same issue here! I kept trying different things and got rejected 3 times. This is not the first year that I've had problems with the Form 1116. Trying to get in touch with Turbotax was a nightmare! I'll try to be patient and hope for an upgrade. Filing by mail given the USPS current problems just doesn't seem to be a good option.

ClickAuthor

Level 6

[Deleted post since it was pursuing a wild goose]

venkyus

Level 2

SUCCESS !

Was able to submit successfully after identifying issue with turbotax for this exact issue 3 times. I compared form 1116 for last year and this year on saved PDFs and turbotax was populating "Various" for a date field (see image below).

Solution: view your form 1116 for year 2020 in form view mode and override manually value "various" to date 12/31/2020. This is a date field and should contain date value. Last year this field was populated by turbox correctly.

Joe1151

Level 2

Various and RIC did not work in Form 1116 Part II Line A but 12/31/2020 did. Both Federal and State accepted. Thank you

lgs0304

Level 2

Success! As suggested by venkyus, I changed the Various date to 12/31/20 and resubmitted. I just received notice that my return was accepted. Thank you very much!

ClickAuthor

Level 6

I can confirm that the Feb 27, 2021 Turbotax updates do not correct this problem. The workaround of using 12/31/2020 for the dates on the 1116 Worksheet is still needed.

After researching this some more, it does appear that it is Turbotax's responsibility to convert "Various" to year-end date of the return when e-filing.

Ronlep

Level 2

Yes. I have the same error message on rejections. I've reviewed all info in TT, removed and reinputted some, followed the instructions to review the FTC Interview section and still have no solution.

tapper100

Level 2

My return was finally (on the 6th try!) accepted(!) after I changed the Form 1116 *Worksheet* (Form "1116 Comp Wks") Part II Date field from "various" to the date 12/30/2020. Clearly the IRS has screwed up their parsing of this field to where it doesn't accept the word "various".
Thanks to everyone here who has suggested this change!

Ronlep

Level 2

I had this same issue and finally got accepted today. I am convinced the issue is caused by using the Simplified method for AMT. Today I did not use that simplified method and it was accepted.

The only other thing I did was change the "Paid Date" from "Multiple" to "12/30/20." This may have caused a different issue for some but I think the real culprit for this thread is the Simplified AMT.