I only have $4.00 in foreign tax credit on my 1099-DIV. TT is forcing me to upgrade to complete form 1116, however according to the IRS website I don't have to complete form 1116 if all of the FTC was reported on the 1099-div (which it is) & meet the other requirements (which it does). How can I still proceed with filing basic edition if it won't let me but the IRS says I cna claim the FTC without form 1116? IRS language below:You may be able to claim the foreign tax credit without filing Form 1116. By making this election, the foreign tax credit limitation (lines 15 through 23 of the form) won't apply to you. This election is available only if you meet all of the following conditions. All of your foreign source gross income was “passive category income” (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for high-taxed income described later, and (b) certain export financing interest.All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-3 (Form 1065), Schedule K-3 (Form 1120-S), or similar substitute statements.Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).Thank you in advance.Candace

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1099-DIV Foreign Tax Credit

Forum|Forum|4 years ago
January 28, 2022
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I only have $4.00 in foreign tax credit on my 1099-DIV. TT is forcing me to upgrade to complete form 1116, however according to the IRS website I don't have to complete form 1116 if all of the FTC was reported on the 1099-div (which it is) & meet the other requirements (which it does). How can I still proceed with filing basic edition if it won't let me but the IRS says I cna claim the FTC without form 1116?

IRS language below:

You may be able to claim the foreign tax credit without filing Form 1116. By making this election, the foreign tax credit limitation (lines 15 through 23 of the form) won't apply to you. This election is available only if you meet all of the following conditions.

All of your foreign source gross income was “passive category income” (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for high-taxed income described later, and (b) certain export financing interest.
All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-3 (Form 1065), Schedule K-3 (Form 1120-S), or similar substitute statements.
Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).

Thank you in advance.

Candace

TurboTax Free Edition Online

Best answer by LeonardS

Yes, you have the option not to take the $4.00 foreign tax credit shown on your 1099-DIV. This will not cause a problem with your return if you use the standard deduction or itemize your deductions.

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Candace978Author

Is it an option to not list it as a credit & take it as a deduction even if I am not itemizing & using standard deduction? or is it a problem if the amount is listed on the 1099-div but not reported as a credit?

LeonardSAnswer

Yes, you have the option not to take the $4.00 foreign tax credit shown on your 1099-DIV. This will not cause a problem with your return if you use the standard deduction or itemize your deductions.

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Candace978Author

Thank you. I actually just found the same questions and answers from 2019 & was just about to delete my question. I was unable to find the answer earlier so I posted. Thank you for the response.

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Bullet2022

trying to e file and keeps giving me an error and brings up a form i\Idon't have how can I get rid of that form

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ThomasM125

A simple way to delete forms in TurboTax online is to use the Tax Tools menu option, which is on your left menu bar when you are working in your program. Then, choose Tools and then Delete a form.

If you are working in the download TurboTax program, use the Forms Mode on your menu bar to bring up the form you want to delete, then choose the Delete Form option at the bottom of the form.

@Bullet2022

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Falls Church

Candace,

I don't know if your situation is the same, but my daughter had a small foreign tax in 2020, but no tax liability, so she was not able to take a credit. Turbotax nevertheless generated a 1116 worksheet for 2020 (just for the file) for the carryover showing no carryover. This year, Turbotax tried to also throw me into the 1116 worksheet and partial credit. I ran her taxes on TaxAct to get the free additional state, and that did give the full credit. I decided to just start her taxes over on Turbotax , this time NOT importing her 2020 information, just putting her personal information, etc., in by hand. That put me to a screen that verified the IRS language you quoted, and gave her the full credit with no 1116.

Hope this helps.