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Solved

E-file rejected due to ForeignTaxesPaidOrAccruedDt on Form 1116

Forum|Forum|5 years ago
February 21, 2021
59 replies
0 views

My federal e-file that I did yesterday (2/20/21) was rejected this morning (2/21/21) with the following message: "We encountered an issue processing your e-filed return. Please review the "ForeignTaxesPaidOrAccruedDt" on Form "1116" in the section "ForeignTaxCreditSource"."

All of my foreign taxes are on mutual funds held in a Vanguard brokerage account, so my numbers/data are coming from the Vanguard 1099-DIV.

I have run through the Foreign Tax Credit flow again and can't find anything to change/correct; I am ending up with the exact same results as before. In particular the date paid section looks correct, with the "paid" box checked (rather than accrued) and a date of 12/31/2020.

The only thing I was slightly uncertain about is that yesterday when it did the final review it asked me for "Qual Div and LT Cap Gains" for the foreign tax credit worksheet (and said this had to be greater than $0). I entered the "QDI eligible foreign income" value from the "2020 Foreign Tax Paid" section of my 1099-DIV. I am not certain this correct but do not see what other value would be appropriate to enter here. However, I also don't see how this would be related to the error message above.

I am wondering if this is a bug in TurboTax, as I had a similar experience last year where it was rejected due to a bug on their end, and had to wait until they had fixed the issue in order for it to get accepted.

Has anyone else encountered this? Or can advise on how to resolve it?

TurboTax Premier Online

Best answer by hongcho

A locally installed TT does not let you change the 1116 ATM date field and e-file (only print). When using simplified vs non-simplified, the difference seen on the 1116 ATM form is the data in column A (which includes the date). And... at least with a locally installed TT, I attempted to e-file at least a dozen times before it finally went through (using incorrect data that I plan to amend when this is fixed).

Turbo tax is making huge engineering, support, and PR mistakes here. I told them in this thread and on the phone within days of the forms being available (February) that this is going to affect, potentially, every customer filing a 1116 form and that it needs to be escalated and fixed NOW. I guess I was brushed off as being dramatic. I guess it is time to leave an amazon review.

I tried it again today. TurboTax (Windows) had an update.

This time, when I tried to e-file, TurboTax itself is rejecting it saying

"We Won't Be Able to E-file Your Return

"It looks like you have a form or tax situation in your federal return that TurboTax doesn't support for e-filing. We do support it for filing by mail.

"Here are the details:

"You elected the simplified AMT Foreign Tax Credit limitation. Print the return and file by mail.

"Don't worry, even though you are unable to e-file your return, we'll still help you file your return by mail."

So, it seems TurboTax gave up (?) on the simplified AMT Foreign Tax Credit limitation.

I am really tempted to change this.

Show previous replies

MW66071

TurboTax says there are no errors in my return but it continues to be rejected for reasons related to form 1116. A TurboTax representative told me this is a known issue that is being worked on. Based on the dates of the other messages related to this issue, I don't think it is being actively worked on.

ShadowLink

I spent more time with TurboTax support this morning trying various things. She suggested that I might be able to simply delete Form 1116 and file without it, but she obviously couldn't guarantee that that wouldn't be a problem down the line. She found some vague instructions about situations where you might be able to not file it. In any case, she didn't seem aware of this bug.

I've given up - I'll print out my 70 page return and mail it in.

This has been a terrible experience and a big waste of time. I'll definitely look into alternative tax software next year. It's bad enough that Intuit's lobbyists have made it such that our taxes are so complicated we need their software - the least they could do is make it work (even if the IRS changes the schema).

I've submitted a request for a refund for the $20 state e-filing fee that I can't use. For those in the same boat, you can go here and fill out the form. It says it'll take 5-7 days to review and isn't guaranteed...

MW66071

I changed the paid/accrued dates on From 1116 from Various to 12/31/2020 and the returns were accepted.

RHugg

Employee

sbsanon,

On the 1116 Comp Wks, Part I, line g "Name of Country" should say "Various" if it is from a mutual fund or state the country if told on 1099. On line 1c, where it says Dividends from Schedule B - Put the amount of Dividends that the foreign tax applies to from the 1099 - under column A,B, or C whichever is, or you, are reporting The Vangard 1099 info.

Then in the same column down Part I line h, Qualified Dividends and LT Capital Gains, put the amount that pertains to the same foreign tax/country.

Move down to Part II, Foreigh Taxes Paid/Accrued, Line 8: check box for either Paid or Accrued. Then the same as the column above (A,B,C-whichever you used) put the amount of the Foreign Tax Paid under Dividend.

This should fix it.

Do not use the QDI Foreign Income. This is for the QDI calculations elsewhere.

sbsanonAuthor

@RHugg The solution you are giving sounds like it is for a completely different issue. The issue that was directly relevant to me was that when using the simplified AMT calculation for foreign tax credit, the country field is left blank on the AMT version of form 1116, but the IRS in their e-file xml specs made it required. The country is not "various"; it is "RIC". Also, I use the online version of TurboTax and as far as I know I cannot edit the worksheets directly; everything is populated by going through the TurboTax interview questions.

In any case, I have already filed by mail since TurboTax gave me the message saying I couldn't e-file.

RHugg

Employee

Sorry I have the premier version. Only trying to help you. Have a nice day.

clock98

foreign taxes paid on my canadian national railway stock. its my only foreign holding and turbotax is very unfriendly in making me manually fill out an 1116. I don't understanmd how to do it. If turbotax doesnt fix this in the 2021 software, I don't think I'll use turbotax in 2022 and going forward

joecho613

I got this error message:

What happened

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

My situation:

I had a 1116 generated by Vanguard VEU foreign tax paid from a Fidelity account.

I fixed this by:

Going to 1116 Comp Wks, Part II Foreign Taxes Paid/Accrued Line 8

Changing the date for Country A from Various to 12/31/2020 as suggested in this thread

E-file accepted about 10 mins after e-filing.

tucker1957

Employee

I experienced the same Form 1116 situation. TurboTax error check revealed everything ok. But I got four IRS rejections which have also affected my state tax efile. Last resort was to surf for similar experience. Found a slew of same TT experiences. But that doesn't resolve the problem. Hope that TurboTax will initiate action to remove the problem at TT or IRS end.

Adrian S

My rejection email included the following message,

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

I am glad I came upon this thread after having my return rejected 3 or 4 times. Following advice I read here, I change the date entry in Form 1116, Part II - Foreign Taxes Paid or Accrued, (l) from "various" to "12/31/20".

My return was accepted!!

Good luck to all who are stuck in this little minefield!

tucker1957

Employee

Bravo and many thanks. I changed the Form 1116 date to end of year, and, bingo, the IRS accepted my return.

JAGHRG

Every year, Foreign Tax Credit form 1116 never works initially, until it is correct later by Turbo Tax. I t appears that the amount accrued and used and entered in Part II used to determine the amount to be used for line 8 is never automatically transferred to line 9. Manual Override with that number to line 9 is considered an error, and not accepted by the IRS. A perpetual problem.

RHugg

Employee

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.

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.

lewisinde

After multiple rejections, changing the date in Part II from Various to 12/31/2020 solved my problem.

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.

linaj20201

This issue has been submitted and is currently under investigation. If you would like to receive an update for the progress, click on the following link to get notified:

Form 1116 reject error

If you have paid taxes on the mutual funds to both foreign and the US tax authorities, the IRS allows you to claim a foreign tax credit on Form 1116 on your US tax return. The amount usually is reported in box 7 of your Form 1099-DIV. The amount will show on Schedule 3 line 1 and line 20 on Form 1040.

JeanAtkinson

This thread is very confusing because people are discussing several very distinct issues. What many of us are seeing is not that the IRS is rejecting the return, but that TT is refusing to e-file it in the first place, with the error "You elected the simplified AMT Foreign Tax Credit limitation. Print the return and file by mail". So the issue that's supposed to be under investigation is not at all the right one, and will do nothing for us!

If you are one of the people getting this error, I suggest moving to this thread, which is exactly about this issue and not about anything else.

linaj20201

My post from above only refers to the e file error due to "ForeignTaxesPaidOrAccruedDt on Form 1116"

If your e file error is due to simplified AMT Foreign Tax Credit limitation, you will need to paper file.

@ JeanAtkinson

crmcmast

I experienced the same issue, but read dehollowell post about changing the "various" date in Form 1116 to 12/31/2020 and it worked like a charm (finally accepted)!

Wasted a lot of time and was very frustrated. Thank you dehollowell!!!

Foxbat

I too had difficulties getting e-filed due to rejection related to foreign tax credit. On the 8th attempt to file in went through. I have been filing with TT for about two decades and always with a FTC. To fix the issue, whatever it was, I did the following (I only have passive category income):

Part I: Foreign Country: RIC. Do not use "Various" and change it both at all 1099's with FT and on the Form 1116 and 116 Worksheet. In the 1099's that feed to Form 1116, change Form 1099 Box 8 so that both the imported and input are RIC. If one was left as "various", I got a reject.

Part II. (l) Date paid or accrued. Again, do not use "Various". Use an actual date (I used 12/31/2020)

I also checked my prior year Form 1116 against this year to assure the non-numeric items were consistent between the two. Hope this helps!

I found that until I had all of the above lined up the return would reject. It took seven errors, but finally figured out when all the various had been eliminated completely that is when the filing was accepted.

lynhistory

Thank you Foxbat. I had eight rejections. Your suggestion re elimination of the "various" entries, use of RIC, and a fake date worked perfectly. Thank you, thank you. Too bad Turbotax is not as smart as you.