E-file rejected due to ForeignTaxesPaidOrAccruedDt on Form 1116

Yes, a solution for most of the reject issues has been found. I posted it about 2-3 weeks ago, you will find the discussion beginning on page 18.   I will repost it now.  The advice is for passive income, particularly from mutual funds.  

[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

TT does not flag the issue as an error, but the IRS does.  So when you use Step-by-step it will say things are good to go -- they are not.  When you use Forms approach there will not be any flags on the 1099-DIV or Form 1116 either.  You have to go into each and search down the errors on your own.  My previous post explains the process I used.  It only took seven fails before I caught all the errors and succeeded on the eight attempt.  Now that I laid out the steps, hopefully that will reduce the number of attempts others will need to catch the errors the IRS finds but TT misses.

Illegitimi non carborundum

--Foxbat

Goldiegirl

Like Foxbat, I don't have a solution either.  But it is super weird as line 3a is an auto-entry that TT is making from your 1040.  It's doesn't appear to be anything you can enter or should override.  

Just a dumb suggestion:  are all the boxes properly checked on your 1040 Worksheet (there is also a Standard Deduction Worksheet you can check out).  As that generates your standard deduction on 1040 line 12 which then is auto-entered to line 1116 3a.   

Could it be that your filing status doesn't match your standard deduction?  Just pulling at a straw.  Apologies if you already checked this.

Otherwise paper filing can get the job done with no more frustrations or calls to TT.

Any data on that second Form 1116?  You may have a source document (1099-DIV) that is feeding to a separate Form1116, possibly with null data.  That would prevent you from deleting it.  And, of course, check for "various" in Form 1099-DIV for countries (make sure both lines in Box 8 have the same answer, RIC works best and is also the correct answer for mutual funds) and Form 1116 does not have "various" in dates.

The bug is the dropdown which allows "Various" for country.  IRS does not recognize this.  Another user pointed this out and I chose a country and the return was accepted.

Have you looked at your return using the Forms method (in the blue bar at the top, far right; toggles between Forms and Step-by-step),  then scroll through the forms looking for a red exclamation mark (!)? 

Likely one next to Form 1116 based on your comments.  Check on the form with the red ! then click the red "Errors" octagonal box (looks like a stop sign) with an exclamation mark at the top of the column (on the left) for all the Forms.  In the open form at the bottom there should/might be an popup explanation of what the issue is.   No guarantees though.

As an example, I have a foreign tax carryover from last year and my Form 1116 Comp Wks reads (Not Done).  When I open the 1116 Comp Wks and click on the Errors at the top of the far left column a box pops up at the bottom of the worksheet telling me the error is because the carryover "requires Form 1116, Schedule B, which will be available in a future product update."  So I get to wait.  I have a Schedule H-T also awaiting a final form, that one gives a date of March 17 for release.  I do not see a release date for the Form 1116 Schedule B.

Personally, I am more annoyed with Congress making changes to the IRC so late in the year the IRS cannot get the changes reflected in the forms.  I am very happy I am not an IRS employee attempting to translate Congressional legalese/gibberish into a form that actually works.  Mostly works.  If the Form delay is not due to Congressional tardiness, then I move to being annoyed with the IRS, and if not the IRS that is late then on to TT.

Yes, I see the same thing on my 1116.  And yes, also that the totals are correct for the Carry-Forward amounts.  And yes, TT is marking them in yellow-boxes/red-typeface as Errors.

There is another form, Form 1116 Schedule B, (new for 2021, you can view it on the IRS website) that must be used to calculate the Carry-Forward amounts.  And TT says that that form won't be available until 3/31/22.   So it's a long wait.  And that Schedule B has to be attached to Form 1116 so it's needed in order to file.

Here's the link to the TT schedule for forms availability-it does say that Form 1116 Schedule B will not qualify for e-file.  So I think you need to wait for 3/31 for the form to be available and then you will need to file by paper.   Unless TT changes something.

https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html 

On the other hand the entry of "various" for countries where the tax was paid may stop e-file even though "various" is a totally legitimate entry.   So even if you don't have carry-forward it is still possible your e-file can get rejected due to "various."  Though TT may have fixed some of this.