How to add my previous years foreign tax carryovers when I don't have foreign income and haven't paid foreign taxes this year?

Forum|Forum|1 year ago
March 2, 2025
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I'm using TurboTax premium - the web version. When I go trough the questions for FTC I'm kicked out before the carryovers section because I don't have any foreign income this year.

Best answer by mglauner

Hi @ThomasM125 ,

Went trough the screens but mines look a little bit different. So under "Estimates and Other Taxes Paid" I see the following:

I clicked "Foreign Tax Credit" and I see:

I press continue and this is the next screen:

I choose "Yes" and press "Continue". Then I'm redirected to the following 2 screens, on each of them I press "Continue" since there isn't any other option:

When I press "Continue" on the second screen I'm kicked out of this questionnaire and I'm redirected to the screen with all deductions.

Are the screenshot you posted from the current Turbotax online version ? My screens look totally different...

Regards,

Hristo.

Yes, in TurboTax Online you won't be able to enter your Foreign Tax Credit Credit Carryover in the interview, since you have no Foreign Income/Tax to report for 2024

However, if you transferred in your 2023 return, you'll see the FTC Carryover on the Foreign Tax Credit Computation Worksheet, after you pay for your return and View/Print/Save your return.

I would advise noting the carryover amount anyway, to be used when you do have Foreign Income/Tax to report.

@hristoterezov

pk12_2

Employee

@hristoterezov , yes that is correct. To be able to use your Un-allowed /carried over FTC you must have Foreign income that is being taxed for the current year. What the form 1116 is trying to do is meet the requirement(s) of the "avoidance/ mitigation of double taxation " clause of the Tax treaty in effect between US and that other country / countries .

Does this make sense ?

hristoterezovAuthor

Sure!

I don't want to use the carryovers in the current year! I just want to ultimately fill form 1116 schedule b with the carryovers from previous years. How can I do that?

pk12_2

Employee

@hristoterezov , I am lost here.

(a) When you have foreign income and taxed by both US and another contracting country ( Have a Tax treaty that is ), the "prevention/mitigation of double taxation clause allows the use of form 1116 to get Foreign Tax Credit. The allowable portion for the tax year under consideration is included as a credit on your current year filing. Any remaining and unused /unallowed FTC ( US recognizes the full amount paid to another contracting country ) is then banked -- can be carried back one year or carried forward for a number years. This is carry back or carry forward.

(b) To use this " carried " Foreign Tax credit in any year ( past or future as allowed ), you must have foreign source income and some foreign taxes paid to trigger the form 1116 computation.

Given the above, please explain what you are trying to do .

I must be mis-understanding your situation. So please can you tell---

Do you have foreign source income ? for 2024 tax year?

Was this income taxed by both a foreign country ( source country ) and the USA ?

Does this foreign taxing country have a Tax treaty with the USA and in effect ?

Please help me understand.