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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

Walnut5

Was this resolved? TurboTax refuses efiling with a 1116 now. Simple wage and foreign taxes. Only option is to snail mail. Last year was no problem. Advice? Updates?

lynhistory

Yes, it was resolved for me on two returns having foreign income and foreign taxes paid (one having only foreign passive income and taxes -- on div and int -- and the other having both passive and earned income and taxes. Follow Tl888's instructions meticulously. Especially do not use "various." The fake date works. "RIC" is necessary for the passive inc from, say, a mutual fund.

mmmwgm

Fox Trot answered this question in a great way earlier. Basically if you have answered "various" for any date on the form 1116 and/or on the Easy Step you must change it to any numerical date in the correct year. I used 12/31/2020. You must do this for every date answered various in ALLl places of the 1116 entries on forms and Easy Step.

Also, if you have more than one 1116 the one with the highest foreign taxes must be the first one done since it brings forward numbers from the subsequent form 1116s.

I didn't have the following problem, but based on what others were saying, you can not use the simplified method for figuring the credit so you must elect to NOT use the simplified method.

These changes worked for me after several rejects. I hope they work for you if you are having similar problems.

drennman

Employee

Yes, I had my e-file return also immediately rejected for a Form 1116 error. It was pretty cryptic message from TT and I had no real clue how to fix it because TT couldn't find anything to change or anything that was wrong. I did change the Part II Date Paid from Various (which is correct and successfully done in prior years) to 12/31/2020. As I found this as one of the work-arounds in this chain.

So far my e-file return has not been rejected so it looks (potentially) good as my prior attempt was rejected immediately.

gkalmond

Changing from "various" to "12/31/2020" worked for me - thanks!

leeseng22

Yes, I am have the same issue. I am not sure how to correct it? My foreign tax only $160. Every year I take the credit without file Form 1116. This year somehow I do not see the option. Plus the Turbo Tax emailed me it will walk me through to correct it. I did not see where the instruction?

I called Turbo Tax help center, I cannot get through the machine to talk to real person.

BobKarl

Thanks for the great explanations. I have the same problem

paulinus49

After passing TT final review, my return was immediately rejected 3 times. Then I found his thread. Changed "various" to "RIC" and changed date paid from "various" to 12/31/2020...so far it's been about 10 minutes and it hasn't yet been rejected. I wish there was a way to put the solution at the very front of the thread. I went to page 20 and worked backwards for a page or two and found the work around.

Thanks to all who contributed to the solution. To Turbo Tax: I'll hold my tongue.

Foxbat

To get an answer moved up to the top page requires people to give an answer a "thumbs up". Currently the top answer (which does identify the problem but seeks a solution) has four thumbs up and the Foxbat (that would be me) answer is on page 18 with one thumbs up. Yes, I am pleased that people have found my answers helpful but with only one thumbs up it will remain buried.

If you found the answer helpful give it a thumbs up so others can find it.

elissameck

It seems TT has now set it so that you cannot eFile if you have Form 1116. I'd be glad to change the dates, etc. in order to avoid paper filing, but they've taken away the option. Is there any way to find out if they are working on this?

I need to mail my quarterly payment in the next 2 days, but I can wait to file in a few weeks if this will be resolved. If not, I might as well mail it all at once.

Also concerned as New York state requires me to eFile but TT won't allow me to efile state after paper filing federal.

drennman

Employee

I don't know if this will work for you. I think your 1116 is causing a problem because the Date Paid is set (correctly) to Various. TT seems to be having lots of problems with Various.

I think you can change the date by switching to Go to Forms on the View Menu. Click on Open Form and type 1116 in the search box. This will open form 1116 scroll down until you see Part II. Change Various in the Date Paid column to 12/31/2020. Close the form and I think you should be able to e-file. EasyStep is unlikely to let you change the date.

Hope that helps.

elissameck

Thanks so much for this, but it seems that TT has now blocked the ability for anyone with a 1116 to eFile at all. It gets me all the way up to the point to submit and then says I cannot eFile. Pretty lazy workaround to the issue!

headra63

when I talked to Eric yesterday he said he was emailing me a link to get the amount that I paid to E-file my taxes returned. I do not see a link for that here. Please advise me how I get that money returned to my account as I was told I need to send in a paper copy of my return.

Thanks,

Robin Head

PaulFM

The bad news is that as of April 21 Turbo Tax still rejects the Federal return because form 1116 for a Foreign Tax Credit still needs line 32 to be blank, which it is, so can not file federal or state tax return. At least will save $23 for mailing the state return. Will look for different software next year, Good Bye TurboTax!

Foxbat

Line 32 is the sum of lines 25-31, and each of those lines are from separate Parts III. That must be one super complicated return to need all of those items!

Most of us are fortunate in that we only have general passive income from mutual funds and can get our Form 1116 to file by going into our Form 1099-DIVs and making sure in Box 8 that there are no "various" entries: dates are included and in the mm/dd/yyyy (12/31/2020) format and the two (yes, two) country of origin boxes are marked "RIC". RIC is for mutual fund dividends from multiple jurisdictions. Finally, in Box 8, check the box to indicate the dividends are from a mutual fund. When done with the Forms 1099-DIV then do a error check in forms mode to make sure nothing went wonky, then on to the Form 1116 itself to check for the same items and assure no errors.

I posted this three weeks ago and a couple times in between, but for some reason TT is not monitoring this thread and moving the solution to the first page of the thread. TT web support is supposed to monitor these threads but guess not enough people encounter Form 1116 to rate high enough on the user collective pain threshold. TT tech support said web related items are not accessible by them nor is there a way for users to contact them.

swabbinsky

Employee

I waited for quite awhile (partly until my spouse had done the quality review) and figured I'd see if I could get by the "can't e-file" message. I had initially entered RIC etc and still had the message. Well got to the try a file yesterday. The message is now gone (there have been an update or two since looking at it) for me. I did e-file and have about 24 hours with no rejection.

I have RIC in Part I / line i / column A

"From 1099s" on 1a, the amount in Column A

Part II / line A

a few weeks ago, this had "12/31/2020". Now it has "1099 taxes"

Both the 1116 and AMT 1116 look the same. My recollection is that there were a couple differences a couple weeks ago. So maybe TT has fixed this.

All my foreign tax was from 3 mutual funds from Fidelity, Schwab, and Vanguard.

anna-longman0

I have been filing Canadian Icome for the last 10 years, You donot have an ein and Canada will noy guve you one. They will only supply this type of informantion to Canadian filers of Canadian forms, They do not wish for an ein for another country.+

If they have changed this policy - let me know. I too have to stumble through. I have Turbo tax account and the expert was very helpfull.

survij

Hello,

I have encountered same problem yesterday April 23,2021. I called for TuboTax help and they could not find any problem with the tax return. On top of it , Turbo Tax is asking me to file by mail as this has happened twice on two different attempt.

Shame on Turbo Tax. Why pay for efile?? Not going to use Turbo Tax if this not fixed

Foxbat

[Note from Foxbat: This is a compilation of my prior weeks postings on the topic beginning on page 18. If you are reading this, TT has likely not implemented corrections yet.]

I too had difficulties getting e-filed due to rejection related to foreign tax credit. On the 8th attempt to file it 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 with foreign taxes [specifically, dividends]):

My advice first assumes you have run error check for your entire return and confirmed no other errors in foreign tax credit have been flagged by TT for resolution before you attempt to file. Look for error flags in the Forms (vs. Step-by-step) format. Click the red “errors” stop sign symbol just under the blue TT banner, top left; if all is OK you will get a green checkmark and “Great News: Your return has no errors” at the bottom center of your screen. Errors show up as flags next to the form with an error. If you have done these checks and TT says all is fine and you attempt to file, but the IRS disagrees and rejects the filing and the TT rejection note says it is related to the Foreign Tax credit and to review your answers, that is when my advice kicks in.

I have only tried this with passive category income from mutual funds, if you have more exotic income (some of the other boxes) then this may not help.

You are going to be looking for two major things: Country of Origin and Dates of Payment.

Start with each of your 1099-DIVs that have foreign income. It was easiest for me to locate these using the forms option (vs. step-by-step) in TT.

If you only have dividend income, in Box 7 go to line c and check the box for A. That tells TT that while you may have multiple 1099-DIVs with foreign income they are all passive dividends. If you have other types of income as well, they go by type into Boxes B or C.
In the 1099-DIVs go to Box 8 so that both the imported and input spaces say RIC. RIC is the designation for foreign mutual fund dividends from potentially multiple countries. If one was left as "various" or blank, I got a reject. Select "RIC" from the drop-down menu under countries [scroll up, not down, to find RIC] in BOTH locations in Box 8 that asks for country source. Check again that BOTH blanks for foreign country are showing RIC, that has caught a number of us.
In Box 8 there as a box to be checked if the foreign tax is from a mutual fund. If so (true for most of us), check this box.

Form 1116.

First check that you have identified the nature of income in the box before Part I. The advice is only applies to passive category income, specifically mutual funds with foreign dividends. For this type of income, the box on line c is checked.

Part I: Line i. If you have the countries identified in your 1099-DIVs as RIC that should carry over. If not, check you 1099-DIVs again to make sure they are showing RIC. If a 1099-DIV Box 8 was left as "various" or blank, I got a reject from the IRS when attempting to efile.

All of your passive category income (dividends) should show up in Foreign Country Column “A” as “RIC”. If not, go back to your 1099-DIVs to select “A” in Box 7 line c so you do not have multiple Forms 1116 for one type of income.

Part II.
1. Line (j) is normally paid.
2. Line (l) Date paid or accrued. Again, do not use "Various" or leave blank. Use an actual date in mm/dd/yyyy format (I used 12/31/2020), as long as it is not “various” it seems to work. I did not try a non-2020 date. If I left the line as “various” or blank, I got a reject.

Look for error flags in the Forms format again as above. If all is fine and the rest of your return shows ready to fine, complete your filing. While TT may be fine with what you entered, the IRS may still not like it and reject it and TT will identify the reason for rejection as “e-file rejected due to Foreign Taxes Paid or Accrued”. If so, go back to the start of these suggestions (yet again) and review for gaps/omissions again. 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 on the eighth try.

Other tips if you still receive reject notices:

(1) Make sure there isn't some bit of income lurking out there as foreign on a 1099. You can do this by comparing the amount of foreign dividends total from each of your 1099-DIVs to the total showing in the Form 1116.

(2) Confirm the Form 1116 itself does not have any "various" or blanks for dates where you have numeric entries. If it does, then go back to your 1099-DIVs to identify where the entry is coming from and make the correction.

(3) Checked your prior year Form 1116 against this year to assure the non-numeric items were consistent between the two.

(4) Most people use the Simplified AMT option. Changing the option requires, I think, IRS consent and can cause problems, so it is something you do not do casually.

Yes, it is a pain to do all the detail checking. It's a detail check odyssey or mailing the return choice. Hopefully you get to success much quicker than I did. Hope this helps!