Question

How to generate Form 1116 (Foreign Tax Credit) automatically from Schedule B

Forum|Forum|2 years ago
March 16, 2024
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We moved from USA to Canada November 1 as permanent residents (we are a married couple and both American citizens). We need to report the last two months of income from US sources to Canada. There is only passive income (interest and dividends) to report on the Canadian taxes. The interest and dividends have all been reported from the 1099s on the US tax return but no foreign taxes show as being paid out of the 1099s. How can I automatically generate a 1116 Foreign Tax Credit form, instead of manually, to report the last two months that I will be reporting (paying) in passive income to Canada on the USA interest and dividends to receive the appropriate credit against my US tax return under the US-Canada Tax Treaty?

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AmyC

Employee

Those countries with treaties are all unique. Your dividends under article X and interest under article XI must be reported and taxed as required. You will need to go through the Form 1116 and choose Canada along with the type of income and the amount to be properly taxed. There is no skipping this step or automatic generation.

You have two ways to get to the Form 1116.

You can jump there using foreign tax credit or
you can go to the federal deductions and credits section of the return.
1. locate the section for estimates and other taxes paid.
2. locate Foreign taxes
3. select start/edit/update/revisit

Reference: US Canada Treaty