E-file rejected due to ForeignTaxesPaidOrAccruedDt on Form 1116

[rhugg3]

I have 2 Forms 1116.  One for my Brokerage Acct. i.e. 1099 (1116 Copy 1), and one for a K-1, MLP (1116 Copy 2).  The number from line 8 Copy 2 is not transferred to line 9, but is added to Copy 1, Part II, Country, Column (u), Totaled on line 8 and then correctly copied to line 9.  This is working OK, at least for me.  I did do all my work and entries on the worksheet.  Interestingly enough, Copy 1 which  is the "Master" Form 1116 does not show up automatically in the Forms on the left.  I have to keep opening it manually.  Copy 2 is shown in the forms on the left. 

[swabbinsky]

That is nonsense.  I do volunteer tax prep for the VITA program.  We don't get a lot of rejects but we've never done an amended return because of an IRS reject.  Once accepted, yeah, an amended return has to be done even if a day later.

Different software.  But presumably the same IRS.

[rhugg3]

Not sure who mentioned having to file an amended return.  We were just discussing how to make the failed TTax program i.e., foreign tax credit, form 1116 work so e-file gets accepted. 

[swabbinsky]

one of the posters up-thread said that a TT rep told them they had to file amended after being rejected.

[rhugg3]

Your right, that's bogus.  They need to start hiring some qualified people and programmers.  I have used this program since it's launch (5.25 Floppies) and it just keeps getting worse.  I know the tax code has become more complicated, but this is their business.  When they have a thread that shows a real issue like this one and the one about the 1603 error, they should address it and fix it.  So far, nothing.  Cheers!

[KASARom]

Same issue as others ..

 E-file rejection "/Return/ReturnData/IRS1116/ForeignTaxCreditSource/USTaxWithheldOnDividendAmt - Data in the return is missing or invalid. Please double check your entries."

Please could we have some communication fro TT on status of a solution

[Nof49]

Had same rejection message.  Redid return from scratch and after resubmitting got another rejection message for same reason.  I have filled out this return for past 10 years with Turbo Tax and not once an issue upon filing.

This year when I sign in to Turbo Tax I get a warning message "Change your language and region to do your taxes"  It then indicates "Your preference: English (Canada), Recommended preference: English (United States)"  Not sure if this is linked to above or not but have not been able to find out how to change the language preference.

Today for the first time I got a message that states that Turbo Tax does not support the electronic filing of returns if a F1116 is included that is on the Simplified basis.  In prior years I was always able to file on the Simplified basis.

Does anyone have any thoughts on this?

[steckasaurus]

So I opened up TT this morning, went through the software update process, tried to file again, and received the message that TT cannot file my return because I have a foreign tax situation they can't deal with. (For reference: my issue is not the Date vs. Various issue. My problem is the 1116 AMT issue.) I called TT and spoke with a person. I expressed to her that I CANNOT file my California return in any way other than electronic because of CA rules. So how do I paper file the Feds but E-file CA? Short answer, I can't. The CA e-file system actually looks for an accepted Federal return before accepting the state version. TT had no answer for my problem. She assured me that CA will accept a paper return if the electronic version has been rejected (which it has). So... this is what I am going to try. The IRS website has a free filing service. It is basically just on-line forms that you have to fill in yourself. But I can look at the forms already filled out in TT and just copy each field over to the IRS versions. Hopefully this will allow me to get an accepted federal return, and then do something similar for state. Good luck everyone.

[PrestonArt]

Any clue if there is any plan to correct this problem in a reasonable timeframe?

[JeanAtkinson]

FYI, the same issue (can't efile because of simplified AMT Foreign Tax Credit limitation) is being discussed on this thread, but also with no solution. This seems like a really bad issue if they don't address it. :(

[Mtnbyke]

I found if I changed from a requesting a tax credit to a deduction, my taxes went up by $146 but there was no error.  But I DOUBT that TT will reimburse me for the $146.    I guess I have until May 17 to figure this out.  But I have sizable refund and have to decide if it is worth filing and giving up the $146.

[JeanAtkinson]

@Mtnbyke that's interesting. I haven't tried that (a bit worried about messing it up!), but I assume it's only going to help (or be close) if you are itemizing in the first place?

[swabbinsky]

right.

We are std deduct and ours is over $600 of foreign tax.  All lost if I do the workaround.  I'm waiting until maybe early May and if I have to paper file, I guess I will.

[ReneeM7122]

@swabbinsky  You are correct, you can paper file if the workaround that you were given in the thread doesn't help.

The Foreign Tax Credit is used to offsest the tax that you paid to a foreign country on your IRA.  That's done on Form 1116.  Just to be sure that you've gone through all of the steps correctly, here's how to get to Form 1116 for 2020:

1. Make sure you've entered all your foreign income.
2. From within your return, search for foreign tax credit and select the Jump to link in the search results.
3. Answer Yes to Did you pay foreign taxes in 2020 or have credits to use from a prior year?
4. Follow the instructions to get the credit or deduction.

There's a deduction available as well as well as a credit but in most cases, taking the credit works out better. We'll help you decide which one's best for you when you go through this section.

If you choose to take the credit (most people do), we'll attach Form 1116, Foreign Tax Credit if your situation requires it.

[rhugg3]

Mtnbyke, you will typically pay less tax with a 1116 Credit vs claiming it on a Schedule A.  The calculations are correct.