Question

State Foreign Tax Credit - NOT Working!

Forum|Forum|4 years ago
March 13, 2022
1 reply
0 views

I have 2 separate mutual funds that have BOTH paid foreign tax as a RIC (Registered Investment Company). Federal form 1116 appears to be filled out correctly.

My state, North Carolina, also allows for a credit for foreign taxes paid, however, NONE of the information from my federal return is being carried to my state return where the tax credit is showing as ZERO.

Is this a BUG that needs to be fixed or am I expecting too much of this software?

TurboTax Deluxe Online

M

Mike9241

most sates do not allow a foreign tax credit. (I know of none) they only allow credit for taxes paid to other states (US) to the extent the same income is taxed by both resident and nonresident states.

S

stephen_sr2Author

Apparently NC is one of the few states that DO allow a foreign tax credit. See:

https://www.ncdor.gov/taxes-forms/individual-income-tax/credit-income-tax-paid-another-state-or-country

Apparently TT is not handling this properly.

S

stephen_sr2Author

WOW! Doing this MANUALLY generated a NC tax credit of $239 for just this year! It appears that this software DEFECT goes back YEARS and has likely cost me THOUSANDS of dollars in missed tax credits.

ALL of the needed information to claim this credit is contained in the Federal return. Why can't TT carry this over to the State? Why are we paying a premium price for a mediocre brain damaged product?