I pay foreign taxes in connection with some investments. After I enter those taxes from the Forms 1099. the program asks if I wish to take a deduction or a credit. I choose credit and the program tells me my credit is $109. When I choose continue I am told that "it turns out you do not qualify for this credit."
When I click on "why don't I qualify for this credit"? I get the following pop-up dealing with the minimum tax credit :
"Why don't I qualify for the Prior Year Minimum Tax Credit?
An individual, estate or trust is eligible to complete Form 8801, Credit for Prior Year Minimum Tax to claim the minimum tax credit if they had any of the following for 2023:
An alternative minimum tax (AMT) liability and adjustments or preferences other than exclusion items
A credit carryforward to 2023 (on 2022 Form 8801, line 26)
An unallowed qualified electric vehicle credit
Form 8801 is used to figure the minimum tax credit (MTC), if any, for AMT incurred in prior tax years, and to figure any credit carryforward to 2024. You can only claim this credit in a year when you don’t have to pay AMT, and you can't use the credit to reduce your AMT liability in the future. However, you can carry over any unused portion of the credit to future years.
Based on the info you’ve entered, you aren't eligible for the Prior Year Minimum Tax Credit. If you think you qualify for this credit, go back and double-check the info you entered."
This response has nothing to do with the foreign tax credit.
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Let's see if @rogge1722 or @DaveF1006 are still around this evening and can comment on this. They both have an interest in foreign income and foreign tax credit, etc. It's also possible other Tax Experts currently in the forum may respond first.
if $109 is your only FTC (no carryovers from prior years and no other types of FTC) is from passive sources - dividends, Inteest, etc you do not need to file 1116. if you volunteer to file that form there's an election that must be made on how to handle the FTC for Alternative Minimum Tax purposes. you might not get to these questions until you go thru the FTC
if you don't want the 1116 enter only the amount of the FTC (box 7) do not link to 1116, do not indicate amount of foreign source income. do not indicate country or ric. you may have to delete the 1116 first for this to work. then go back to the 1099-Div and eliminate info not needed
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